Fiscal deficit

Understand the idea

Governments generally finance deficits through borrowing or other financing. A deficit is measured over a period; public debt records outstanding obligations at a point in time. Comparing deficits as a share of GDP helps account for economy size.

An example

Spending of 110 and revenue of 100 leave a deficit of 10 for that period.

Connected ideas

• Related measure or componentGross domestic product

  Deficits are often expressed relative to GDP.

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