Expenditures

Q.

Distinguish between revenue budget and capital budget.

Q.

"The fiscal deficit gives the borrowing requirement of the government". Elucidate.

Q.

In which of the following ways can deficit in the budget be financed?

1. Borrowing from RBI

2. Both A and B

3. Borrowing from the public

4. Neither A nor B

Q.

Revenue deficit can be managed through borrowing or disinvestment. But fiscal deficit can be managed only through borrowing. Do you agree? State reason(s) in support of your answer.

Q.

It is an instrument of short-term borrowing by the Government of India maturing in less than one year.

1. Call money

2. Treasury bill

3. Commercial bill

4. None of the above

Q.

Which of the following is a component of the government budget?

1. Expenditure Budget

2. Investment Budget

3. Capital Budget

4. Income Budget

Q.

Give two examples of capital expenditure.

Q.

Expenditure on law and order is a component of development expenditure.

Q.

Should a current account deficit be a cause for alarm? Explain.

Q.

Economic services of Railway and Postal Services provided by the government are covered by

1. Plan Capital Expenditure

2. Non-Plan Capital Expenditure

3. Revenue Expenditure

4. Both A and B

Q. The government budget has a revenue deficit. This gets financed by:
A. Borrowing B. Disinvestment
C. Tax revenue D. Indirect taxes

1. A and D
2. C and D
3. A and B
4. C and B

Q. Michael took 1, 000 rupees from the revenues of his business and lent it to a friend to kickstart his business. This transaction falls under account.

1. Capital Receipt
2. Capital Expenditure
3. Revenue Receipt
4. Revenue Expenditure

Q.

Which of the following is not a capital receipt?

1. None of the above

2. The government borrows money to finance a deficit

3. The government uses its extra income to finance a deficit

4. The government uses its savings to finance a deficit

Q. Deficit financing creates additional paper currency to fill the gap between expenditure and revenue. This device aims at economic development. But if it fails, it generates ______________.

1. deflation
2. demonetization
3. devaluation
4. inflation

Q. Budget is a/an _____________ statement of expenditure and revenue of the government prepared by the financial authority of the country.

1. annual
2. quarterly
3. semi-annual
4. monthly

Q.

Michael took 1, 000 rupees from the revenues of his business and lent it to a friend to kickstart his business. Where does this transaction fall?

1. Capital Expenditure

2. Revenue Receipt

3. Revenue Expenditure

4. Capital Receipt

Q. Answer in detail:
1. Explain the concept of Balanced Budget.
2. Explain capital receipts and capital expenditure as a part of Capital Budget.

Q. Which of the following are the components of a budget?

1. Revenue Budget
2. Capital Budget
3. Both (a) and (b)
4. Neither (a) nor (b)

Q. 'Deficit Financing' means _________.

1. not spending enough to ensure development
2. spending in excess of revenues
3. relying on foreign aid
4. spending by borrowing from abroad

Q. Answer the following question

What are the main components of budget?

Q. State two sources of government income or revenue.

Q. Indian railways earn the maximum revenue from ______.

1. passenger fare
2. freight
3. rraffic tax
4. passenger tax

Q. The difference between revenue deficit and grants for creation of capital assets is called _____.

1. budget deficit
2. effective revenue deficit
3. primary deficit
4. fiscal deficit

Q. Capital helps in maintaining defence of the country.

1. True
2. False

Q. why does an increase in government borrowings decrease revenue deficit?

Q. Disinvestment Process in India is criticized on the following grounds ________________.

1. Lack of Proper Planning
2. Privatisation of Profit-making PSUs only
3. Failure to meet Budget Targets
4. All of the above

Q. Define deficit financing.