ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The primary deficit adds to the national debt and the positive difference between the interest rate and the growth rate of GDP means that the interest payments alone cause the debt to rise faster than GDP.

Detailed explanation-2: -The debt is the total amount of money the U.S. government owes. It represents the accumulation of past deficits, minus surpluses. Debt is like the balance on your credit card statement, which shows the total amount you have accrued over time.

Detailed explanation-3: -To pay for a deficit, the federal government borrows money by selling Treasury bonds, bills, and other securities. The national debt is the accumulation of this borrowing along with associated interest owed to the investors who purchased these securities.

Detailed explanation-4: -Fiscal Deficit and Budget Deficit The higher the amount the Fiscal Deficit, the higher will be the borrowed amount. Thus, the Budgetary deficit is the only difference between all the receipts and all the expenses in both terms, that is revenue and capital account of the government.

Detailed explanation-5: -A budget deficit can lead to higher levels of borrowing, higher interest payments, and low reinvestment, which will result in lower revenue during the following year. The opposite of a budget deficit is a budget surplus.