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. $37.50$
2. $35.70$
3. $25.00$
4. $10.00$

Let us consider GDP for 2015 be x then for 2016 an increase in 10% gives 1.1x.

Given fiscal deficit for 2015 is 4% which is 0.04x
fiscal deficit for 2016 is 5% which is 0.05*1.1x=0.055x.

%increase = 0.055x-0.04x/0.4x = 0.375.
140 points 2
2