Capital expenditure rises by ₹100 crore while everything else stays the same. Then

both the fiscal and revenue deficits rise by ₹100 croreCorrect answerYour answerthe fiscal deficit rises by ₹100 crore and the revenue deficit is unchangedCorrect answerYour answerthe revenue deficit rises and the fiscal deficit is unchangedCorrect answerYour answerneither deficit changesCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

Capital expenditure is part of total expenditure, so the fiscal deficit rises by 100.
The revenue deficit counts only the revenue account, so it does not change.

Concept: Capital spending and the deficits
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsFiscal deficit

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Ten questions from Budget Deficits, at your own pace.

Capital expenditure rises by ₹100 crore while everything else stays the same. Then

Explanation