Chapter 13: Government Budget and the Economy

Important Questions

1. What is a government budget? List the objectives of government budget?

2. Can there be a fiscal deficit in a government budget without a revenue deficit?

3. Government raises its expenditure on producing public goods. Which economic value does it reflect?

4. Tax rates on higher income groups have been increased. Which economic value does it reflect?

5. Identify the following as revenue expenditure and capital expenditure. Give reasons.

1. Repayment of loans
2. Expenditure on collection of taxes
3. Subsidies
4. Expenditure on building a bridge

Sample Questions

1. Elaborate economic growth as objective of government budget.

2. Reduction in income inequalities raises welfare of the people. How can government help through government budget, in this regard? Explain.

3. Write the difference between revenue receipts and capital receipts?

4. Explain how the government can use the budgetary policy in reducing inequalities in incomes.

5. List the following items as revenue and capital expenditure give reason for the same:-

1. Subsidies
2. Repayment of loans
3. Amount borrowed from UK repaid
4. Grants given to state government
5. Expenditure on building a bridge