Government Budget and Economy — Economics STD 12 Humanities & Commerce — Question

Explain the ‘acceptance of deposits’ function of a commercial bank.

Define capital receipts of government. Describe briefly the groups in which these are classified.

Read the passage given below and answer the following questions from 1 to 4. India has scaled back expenditure, including on productive assets that aid economic growth, as the government is confronted with the risk of its budget deficit blowing out. Capital expenditure-the money spent on creating, maintaining or improving fixed assets like roads and factories-Stood at 40% of the budgeted amount in the six months to September, down from 55.5% in the year-ago period, data from the government's Controller General of Accounts show. The overall spending during the period was 49% of the budget aim compared to 53% last year. That's despite Prime Minister Narendra Modi's Government outlining measures worth more than 21 trillion rupees (281 billion) to counter the economic and social fallout of the Covid-19 outbreak. A closer look at the numbers shows the bulk of the spending was directed towards the poor and the farmers, with crucial sectors such as coal, power, shipping and steel receiving less than a third of their annual budget allocation. Spending on capital assets has so far trailed the so-called revenue expenditure that includes interest payments and overheads such as salaries, the data released last week showed. Modi's Government placed spending curbs on some ministries from April through December to manage its cash flow. Source: Business Standard, Nov. 5, 2020

1. Capital expenditure of the government ............ the assets of the government:

1. Increases
2. Decreases
3. Both [a] and [b]
4. None of these

2. Expenditure on health due to Covid-19 is ............ expenditure of the government.

1. Direct
2. Revenue
3. Both [a] and [b]
4. None of these

3. The overall spending has......... as compared to last year.

1. Increased
2. Decreased
3. Both [a] and [b]
4. None of these

4. A closer look at the numbers shows the bulk of spending was directed towards the poor and the.............?

1. Farmers
2. Labour
3. Manager
4. None of these

 
 

Explain the 'Medium of exchange' function of money. How has it solved the related problem created by barter?

Explain any two objectives of a government budget.

From the following data calculate net national product at factor cost by (a) income method (b) expenditure method:

		(Rs. in crores)
1	Current transfers from rest of the worth.	100
2	Government final consumption expenditure.	1,000
3	Wages and salaries.	3,800
4	Dividend.	500
5	Rent.	200
6	Interest.	150
7	Net domestic capital formation.	500
8	Profits.	800
9	Employers' contribution to social security schemes.	200
10	Net exports.	(-)50
11	Net factor income from abroad.	(-)30
12	Consumption of fixed capital.	40
13	Private final consumption expenditure.	4,000
14	Net indirect tax.	300

Explain how government budget can be used to influence distribution of income?

Describe the evolution of money.

Explain the concept of 'fiscal deficit' in a government budget. What does it indicate?

What are non-debt creating capital receipts? Give two examples of such receipts.