Fiscal deficit: why does it matter?

fiscal deficit: why does it matter?

Level - ADVANCE

Fiscal deficits are caused when the government spends more than it earns. If the deficit is used to build infrastructure it helps; else it can hurt growth. This video discusses the nature and quality of India's fiscal deficit and the consequences.

AUTHOR(S): Uma Shashikant and Deepa Vasudevan

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Fiscal deficit: Why does it matter?

 Fiscal deficits are caused when the government spends more than it earns. If the deficit is used to build infrastructure it helps; else it can hurt growth. This video discusses the nature and quality of India's fiscal deficit and the consequences.

1 2 3 4 5

    1.Which of the following can push up India's fiscal deficit?



  • Rising international oil prices
  • Improvement in sovereign rating
  • Rise in service tax collections
  • 2.Fiscal Deficit can be reduced by



  • Increasing the wages of government employees
  • Increasing government spending on infrastructure
  • Increasing tax revenues
  • 3.When high fiscal deficits lead to large government borrowings that push up interest rates across the debt market it is known as



  • Crowding in
  • Fiscal Prudence
  • Crowding out
  • 4.The Indian government finances its fiscal deficit mainly by



  • Printing currency notes
  • Borrowing overseas
  • Borrowing from the domestic market
  • 5.The quality of fiscal deficit is said to be high if government borrowings are used for



  • Popular welfare schemes
  • Financing capital expenditure
  • Funding oil subsidies
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52 years ago

good presentation

hariharan K. 2 years ago

Simply fantastic!

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