Question
Fiscal deficit was 4% of the GDP in 2015 and that increased to 5% in 2016. If the GDP increased by 10% from 2015 to 2016, the percentage increase in the actual fiscal deficit is ____________.
Options :
35.70
10.00
37.50
25.00
Answer :
37.50
Solution :
Let GDP in 2015 = 100
GDP in 2016 = 100 + 10 = 110
Deficit in 2015 = 4
Deficit in 2016 = 5% of 110 = 5.5
Percentage increase in fiscal deficit = ((5.5 - 4) / 4)x100= (1.5/4)x100= 37.5%
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