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Discussion

The budget deficit refers to the difference between all revenue and expenditure of

  • A.revenue account only
  • B.both revenue and capital accounts
  • C.capital account only
  • D.Increased government expenditure

Answer: B

Correct answer: both revenue and capital accounts

The budget deficit is total expenditure less total receipts, taken over both the revenue and the capital accounts. Confining the comparison to the revenue account gives the revenue deficit, and adding back borrowing gives the fiscal deficit.

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