A revenue deficit exists when a government has:
Correct answer: A. Current expenditure greater than current revenue
- A. Current expenditure greater than current revenue
- B. Capital receipts greater than capital payments
- C. Total revenue greater than total expenditure
- D. Public debt greater than national income
Explanation
A revenue deficit occurs when current or recurring expenditure exceeds current revenue receipts. It indicates that the government is borrowing or using capital receipts to finance ordinary operations.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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