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PSNCR and PSBR

C

chfoong

Member
Hello all, I have a problem coming across the question 15 in part2 quiz. What is the difference between the public net cash requirement and the public net borrowing requirement? By following the study guide, they are supposedly the same.
 
As it says on page 11 of Chapter 11 of the Course Notes, it is the public sector net cash requirement (PSNCR) and the public sector borrowing requirement (PSBR) that are the same. The PSNCR is simply the new name for the PSBR.

However, the public sector NET borrowing requirement (PSNBR) differs from the PSNCR because it does not include the proceeds from the sale of government assets.

So in question 15 of the Quiz, selling the nationalised industry will reduce the PSNCR (and hence also the PSBR), but it will not reduce the PSNBR.

I hope this clarifies things.
 
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