Question : The concept of "fiscal deficit" in the government budget represents:
Option 1: The excess of total revenue over total expenditure
Option 2: The excess of total expenditure over total revenue
Option 3: The excess of revenue receipts over revenue expenditure
Option 4: The excess of capital receipts over capital expenditure
Correct Answer: The excess of total expenditure over total revenue
Solution : The correct answer is (b) The excess of total expenditure over total revenue.
The concept of "fiscal deficit" in the government budget represents the excess of total expenditure over total revenue. It indicates the shortfall or deficit in the government's finances, where the expenses incurred by the government exceed the revenue generated from various sources, such as taxes, fees, and other income.
Fiscal deficit occurs when the government needs to borrow or use other financing methods to cover the shortfall between its total expenditure and total revenue. It is an important measure of the government's fiscal health and is often used to assess the sustainability of its spending and borrowing practices.
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