Question : Assertion (A): Fiscal deficit is greater than budgetary deficit.
Reason (R): Fiscal deficit is the borrowing from the Reserve Bank of India plus other liabilities of the Government to meet its expenditure.
Option 1:
Both A and R are true and R is the correct explanation of A
Option 2: Both A and R are true but R is not a correct explanation of A
Option 3: A is true but R is false
Option 4: A is false but R is true
Correct Answer:
Solution :
The correct answer is (a) Both A and R are true and R is the correct explanation of A.
The fiscal deficit represents the total borrowing by the government from various sources, including the Reserve Bank of India and other liabilities, to cover its expenditure. It encompasses the budgetary deficit and any additional borrowings made by the government.
The budgetary deficit, on the other hand, refers specifically to the difference between the government's planned expenditure and planned revenue in the budget. It does not take into account the additional borrowings or liabilities.
As a result, the fiscal deficit is generally greater than the budgetary deficit since it includes the budgetary deficit as well as any extra borrowing and liabilities incurred by the government.
Therefore, the correct answer is (a) Both A and R are true and R is the correct explanation of A.
Question : Assertion (A): A higher value of primary deficit is better for the economy
Reason (R): High value of the primary deficit indicates the situation where even after paying the amount of interest, a significant amount of borrowing is left to be used for the expenses.
Option 1: Both A and R are true and R is the correct explanation of A
Question : Assertion (A): The current ratio assesses the firm’s ability to meet its short-term liabilities on time. Reason (R): The current ratios assess the ability of the firm to meet its current liabilities immediately
Option 1: Both A and R are true and R is the correct explanation of A.
Option 2: Both A and R are true, but R is not the correct explanation of A.
Option 3: A is true, but R is false.
Option 4: A is false, but R is true.
Question : Assertion (A): Highway and road work announced in Kerala, Tamil Ndu, West Bengal, and Assam in budget 2021.
Reason (R): Such announcements will increase the revenue expenditure of the government.
Question : Assertion (A): Both microeconomics and macroeconomics are supplementary to each other. Reason (R): The superiority of one approach over the other can not be claimed.
Option 2: Both A and R are true but R is not the correct explanation of A.
Option 3: A is true but R is false.
Option 4: A is false but R is correct.
Question : Assertion (A): The difference between Total Assets and Current liabilities is capital employed. Reason (R): Capital employed is a measure of a company's complete financial commitment to its operations, including any expansion or acquisition costs.
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