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Question : Which of the following expressions is correct?

Option 1: Gross Primary Deficit = Gross Fiscal Deficit + Net Interest Liabilities

Option 2: Gross Primary Deficit = Gross Fiscal Deficit – Net Interest Liabilities

Option 3: Gross Primary Deficit = Gross Fiscal Deficit ÷ Net Interest Liabilities

Option 4: Gross Primary Deficit = Gross Fiscal Deficit × Net Interest Liabilities


Team Careers360 5th Jan, 2024
Answer (1)
Team Careers360 10th Jan, 2024

Correct Answer: Gross Primary Deficit = Gross Fiscal Deficit – Net Interest Liabilities


Solution : The correct answer is Gross Primary Deficit = Gross Fiscal Deficit – Net Interest Liabilities.

The Gross Fiscal Deficit less interest payments is the Gross Primary Deficit. Net Fiscal Deficit less Net Interest Payments equals Net Primary Deficit. While the primary deficit shows the total amount borrowed by the government without interest payments, the fiscal deficit shows the total amount borrowed by the government with interest included.

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