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Of the following, which combination of two deficits is most signif icant for the Indian economy ?

The twin-deficit concern links the government's fiscal deficit with the economy's current-account deficit. The former measures a public-finance borrowing gap, while the…

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Of the following, which combination of two deficits is most signif icant for the Indian economy ?

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Correct answer D

The twin-deficit concern links the government's fiscal deficit with the economy's current-account deficit. The former measures a public-finance borrowing gap, while the latter concerns transactions with the rest of the world. Revenue and primary deficits are narrower fiscal measures and do not by themselves express that domestic-external pairing.

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