# Sandeep Garg Macroeconomics Class 12- Chapter 10: Government Budget and the Economy

Sandeep Garg Class 12 Macroeconomics Solutions Chapter 10: Government Budget and the Economy are explained by the expert economics teachers from the latest edition of Sandeep Garg Macroeconomics Class 12 textbook solutions.

At BYJUâ€™S, we provide Sandeep Garg economics class 12 solutions to give a comprehensive insight about the subject to the students. These insights act as a priceless benefit to students while completing their homework or while studying for their exams.

There are numerous concepts in economics, but here we provide you the solutions from, Government Budget and the Economy, which will be useful for the students to score well in the board exams.

## Sandeep Garg Solutions Class 12: Chapter 10: Part B

Question 1

In a government budget, the revenue deficit is â‚¹35 crores. If the revenue receipts are â‚¹70 crores and capital expenditure is â‚¹120 crores, then how much is the revenue expenditure?

Solution:

Revenue deficit = Revenue expenditure â€“ Revenue receipt

â‚¹35 crores = Revenue expenditure â€“ â‚¹70 crores

Revenue Expenditure = â‚¹35 crores + â‚¹70 crores

= â‚¹105 crores

Question 2

The interest requirement as per the government budget during a year is â‚¹1,40,000 crores. If the total borrowing requirements of the government are estimated at â‚¹2,70,000 crores, then how much is the primary deficit?

Solution:

Total borrowing requirements of the government are estimated at â‚¹2,70,000 crores. It means,

Fiscal deficit = â‚¹2,70,000

Primary deficit = Fiscal deficit â€“ Interest payment

Primary deficit = â‚¹2,70,000 crores â€“ â‚¹1,40,000 crores

= â‚¹1,30,000 crores

Question 3

In a government budget, the primary deficit is â‚¹12,000 crores and interest payment is â‚¹7,000 crores. How much is the fiscal deficit?

Solution:

Primary deficit = Fiscal deficit â€“ Interest payment

â‚¹12,000 crores = Fiscal deficit â€“ â‚¹7,000 crores

Fiscal deficit = â‚¹12,000 crores + â‚¹7,000 crores

= â‚¹19,000 crores

Question 4

As per the government budget, the interest payments are estimated at â‚¹10,000 crores, which is 40% of the primary deficit. Calculated the fiscal deficit.

Solution:

Let primary deficit = x

â‚¹10,000 crores = 40% of x = 0.40 x

x= â‚¹10,000 crores/0.40 = â‚¹25,000 crores

Primary deficit = Fiscal deficit â€“ Interest payment

â‚¹25,000 crores = Fiscal deficit â€“ â‚¹10,000 crores

Fiscal deficit = â‚¹25,000 crores + â‚¹10,000 crores

= â‚¹35,000 crores

Explore link: Excess Demand and Deficient Demand

Question 5

From the given table, Find the following:

(a) Fiscal deficit

(b) Primary deficit

 Particulars (â‚¹ in crores) Revenue expenditure Borrowings Revenue receipt Interest payment 70,000 15,000 50,000 25% of revenue deficit

Solution:

Revenue deficit = Revenue expenditure â€“ Revenue receipt

Revenue deficit = â‚¹70,000 crores â€“ â‚¹50,000 crores = â‚¹20,000 crores

Interest payment = 25% of revenue deficit = â‚¹20,000 crores x 25/100[1]Â

= â‚¹5,000 crores

1. Fiscal deficit = Borrowings = â‚¹15,000 crores
2. Primary deficit = Fiscal deficit â€“ Interest payment

Primary deficit = â‚¹15,000 crores â€“ â‚¹5,000 crores

= â‚¹10,000 crores

Question 6

From the given information, determine the following:

(a) Capital expenditure

(b) Total expenditure

(c) Interest payments

 Particulars (â‚¹ in crores) Fiscal deficit Revenue deficit Primary deficit Revenue receipts Non-debt capital receipts 12,000 9,000 5,000 6,000 10,000

Solution:

(a) Fiscal deficit = Revenue deficit + (Capital expenditure â€“ Non-debt creating capital receipts)

â‚¹12,000 crores = â‚¹9,000 + (Capital expenditure – â‚¹10,000

Capital expenditure = â‚¹12,000 crores â€“ â‚¹9,000 crores + â‚¹10,000 crores

= â‚¹13,000 crores

(b) Total expenditure = Revenue expenditure + Capital expenditure

Revenue expenditure = Revenue deficit + Revenue receipt

= â‚¹9,000 crores + â‚¹6,000 crores

= â‚¹15,000 crores

Total expenditure = Revenue expenditure + Capital expenditure

= â‚¹15,000 crores + â‚¹13,000 crores

= â‚¹28,000 crores

(c) Primary deficit = Fiscal deficit â€“ Interest payments

â‚¹5,000 crores = â‚¹12,000 crores â€“ Interest payments

Interest payments = â‚¹12,000 crores â€“ â‚¹5,000 crores

= â‚¹7,000 crores

The above-provided solutions are considered to be the best solution for â€˜Sandeep Garg Macroeconomic Class 12 Solutions Chapter 10: Government Budget and the Economy. Stay tuned to BYJUâ€™S to learn more.

 Important Topics in Economics: