CHAPTER 81 PUBLIC SECTOR FINANCES

Question 1

Current budget deficit

Answer 1

Occurs when government revenues are less than current expenditure. It does not include government capital expenditure.

Question 2

Cyclical deficit

Answer 2

That part of the fiscal deficit which is caused by government spending and taxes changing through the trade cycle.

Question 3

Primary deficit or surplus

Answer 3

The actual fiscal deficit or surplus not taking into account interest payments on the National Debt.

Question 4

Structural deficit

Answer 4

That part of a fiscal deficit that exists even when the cyclical deficit is zero at the top of a boom.