Sandeep Garg Class 12 Macroeconomics Solutions Chapter 10: Government Budget and the Economy are explained by the expert Economic teachers from the latest edition of Sandeep Garg Macroeconomic Class 12 textbook solutions. We at BYJUâ€™S provide Sandeep Garg economics class 12 Solutions to give comprehensive insight about the subject to the students. These insights help 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‚¹ 35 crores. If revenue receipts are â‚¹70 crores and capital expenditure â‚¹120 crores, then how much is the revenue expenditure.
Solution:
Revenue Defici = Revenue Expenditure – Revenue Receipt
â‚¹35 crores = Revenue Expenditure – â‚¹70 crores
Revenue Expenditure = â‚¹35 crores + 70 crores
= â‚¹105 crores
Question 2
The interest requirement as per the government budget during a year are â‚¹1,40,000 crores. If total borrowing requirements of the government are estimated at 2,70,000 crores, then how much is a primary deficit.
Solution:
Total borrowing requirements of the government are estimated at â‚¹ 2,70,000 crores. It means, Fiscal deficit = â‚¹ 2,70,000
Primary deficit = Fiscal Deficit – Interest Payment
Primary Deficit = â‚¹ 2,70,000 crores – â‚¹ 1,40,000 crores
= â‚¹ 1,30,000 crores.
Question 3
In a government budget, the primary deficit is â‚¹ 12,000 crores and interest payment is â‚¹ 7,000 crores. How much is the fiscal deficit?
Solution:
Primary deficit = Fiscal deficit – Interest payment
â‚¹12,000 crores = Fiscal Deficit – â‚¹ 7,000 crores
Fiscal Deficit = â‚¹12,000 crores + â‚¹ 7,000 crores
= â‚¹ 19,000 crores
Question 4
As per the government budget, the interest payments are estimated at â‚¹ 10,000 crores, which is 40% of primary deficit. Calculated fiscal deficit?
Solution:
Let, Primary defict = 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 – Interest payment
â‚¹25,000 crores = Fiscal defict – 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
Find (a) Fiscal deficit and (b) Primary deficit from the following:
Particulars | (â‚¹in crores) |
Revenue Expenditure
Borrowings Revenue Receipt Interest Payment |
70,000
15,000 50,000 25% of Revenue Deficit |
Solution:
Revenue deficit = Revenue expenditure – Revenue receipt
Revenue deficit = â‚¹70,000 crores – â‚¹50,000 crores = â‚¹20,000 crores
Interest payment = 25% of revenue deficit = â‚¹ 20,000 crores x \(\frac{25}{100}\) = â‚¹5,000 crores
- Fiscal deficit = Borrowings = â‚¹ 15,000 crores
- Primary deficit = Fiscal deficit – Interest payment
Primary deficit = â‚¹15,000 crores – 5,000 crores
= 10,000 crores
Question 6
From the following information, determine: (a) Capital Expenditure (b) Total Expenditure (c) Interest Payments
Particulars | (â‚¹in 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 – Non-debt creating capital receipts)
â‚¹12,000 crores= â‚¹9,000 + Capital expenditure- â‚¹10,000)
Capital expenditure= â‚¹12,000 crores – â‚¹9,000 crores + 10,000 crores
= â‚¹13,000 crores
(b) Total expenditure = Revenue expenditure + Capital expenditure
Revenue expenditure = Revenue defici + 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 – Interest payments
â‚¹5,000 crores = â‚¹12,000 crores – Interest Payments
Interest Payments = â‚¹12,000 crores – â‚¹5,000 crores
= â‚¹7,000 crores
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