Primary deficit equals: (Choose the correct alternative)
(1) (a) Borrowings (b) Interest payments (c) Borrowings less interest payments (d) Borrowings and interest payments both
The correct option is (c). Primary deficit is the difference between the fiscal deficit and interest payment. It determines the amount of borrowing which is necessary for the government to pay for the expenses other than interest payments.
Primary deficit = Fiscal deficit − Interest payment.
Foreign exchange transactions which are independent of other transactions in the Balance of Payments Account are called:(Choose the correct alternative)
(a) Current transactions
(b) Capital transactions
(c) Autonomous transactions
(d) Accommodating transactions
An economy is in equilibrium. Calculate Marginal Propensity to Consume:
National income = 1000
Autonomous consumption expenditure = 200
Investment expenditure = 100
Sale of petrol and diesel cars is rising particularly in big cities. Analyse its impact on gross domestic product and welfare.
Explain the 'medium of exchange' function of money. How has it solved the related problem created by barter?
What is the difference between revenue expenditure and capital expenditure? Explain how taxes and government expenditure can be used to influence.