Assertion (A): The primary deficit can be negative.
Reason (R): A government's interest payments are always zero.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer C

Correct answer: C

A is true: when interest exceeds the fiscal deficit, PD is negative.
R is false: any government with past debt pays interest on it.

Concept: Negative primary deficit
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The rule this testsPrimary deficit

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Ten questions from Budget Deficits, at your own pace.

Assertion (A): The primary deficit can be negative.Reason (R): A government's interest payments are always zero.

Explanation

Assertion (A): The primary deficit can be negative.
Reason (R): A government's interest payments are always zero.