Question : _________________ indicates that interest commitments have forced the government to borrow.
Option 1: Low/zero primary deficit
Option 2: Low/zero fiscal deficit
Option 3: Low/zero revenue deficit
Option 4: None of the above.
Correct Answer:
Low/zero primary deficit
Solution :
A low/zero primary deficit indicates that interest commitments have forced the government to borrow. The difference between fiscal deficit and primary deficit shows the amount of interest payments on the borrowings made in past.
Hence, Option A is correct.
