NISM Certifications · NISM-Series-XV: Research Analyst · Economic Analysis
Which fiscal measure is most directly described as a 'primary deficit' being zero?
Primary deficit is zero when the fiscal deficit equals interest payments, since primary deficit is the fiscal deficit minus interest payments. In that case, the government borrows only to service past debt and not for current programme spending.
- AFiscal deficit equals interest paymentsCorrect
- BRevenue deficit equals capital expenditure
- CFiscal deficit equals zero
- DTotal expenditure equals tax revenue
Explanation
Primary deficit = fiscal deficit minus interest payments. It is zero when the fiscal deficit equals interest payments, meaning borrowing is used only to pay interest. Other options use different definitions.
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