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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 ____

- $37.50$
- $35.70$
- $25.00$
- $10.00$

Migrated from GO Mechanical 3 years ago by Arjun

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Fiscal deficit in 2015 $ = 4\%$ of GDP in 2015

Fiscal deficit in 2016 $ = 5\%$ of GDP in 2016

GDP in 2016 $= 1.1 \times $ GDP in 2015

So, Fiscal deficit in 2016 $ = 5\%$ of $1.1 \times$ GDP in 2015 $=5.5\%$ of GDP in 2015.

So, Fiscal deficit increased from $4\%$ to $5.5\%$ of the GDP in 2015.

Percentage increase $ = \dfrac{5.5-4}{4} \times 100\%= \dfrac{300}{8}\% = 37.5\%$

Fiscal deficit in 2016 $ = 5\%$ of GDP in 2016

GDP in 2016 $= 1.1 \times $ GDP in 2015

So, Fiscal deficit in 2016 $ = 5\%$ of $1.1 \times$ GDP in 2015 $=5.5\%$ of GDP in 2015.

So, Fiscal deficit increased from $4\%$ to $5.5\%$ of the GDP in 2015.

Percentage increase $ = \dfrac{5.5-4}{4} \times 100\%= \dfrac{300}{8}\% = 37.5\%$