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  1. 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
    1. 25.00
    2. 37.50
    3. 35.70
    4. 10.00
Correct Option: B

Let GDP in 2015 be x
Now, in 2016, GDP will be 1.
1x Fiscal deficit in 2015 = 0.04 × x
Fiscal deficit in 2016 = 0.05 × 1.1 x
Here percentage increase in the actual fiscal deficit

=0.05 × 1.1x - 0.04 × x× 100 = 37.5%
0.04x


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