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A short concept of Fiscal Deficit in Economics :--

K
Kousiki Chakraborty
25/05/2018 0 0

A fiscal deficit occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings. Deficit differs from debt, which is an accumulation of yearly deficits.

A country's fiscal deficit is usually communicated as a percentage of its gross domestic product (GDP).

Deficits are also caused from a decline in revenue due to an economic contraction such as a recession or depression. Unplanned events, such as natural disasters and war, can also cause deficits.

A deficit is the amount by which a sum falls short of some reference amount. Ineconomics, a deficit is an excess of expenditures over revenue in a given time period; in more specific cases it may refer to: Balance of payments deficit, when the balance of payments is negative. Government budget deficit.

The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included. Primary deficit is one of the parts of fiscal deficit.

Government spending, inflation and lower revenue are among some of the main factors that point to fiscal deficit. But when there is an increase in fiscal deficit it means that the government is spending too much while it is earning less. Hence, it isimportant that the government keeps its expenses under control.

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