Question

Fill in the blanks with appropriate alternatives given in the brackets.
1. The term budget is derived from __________ word Bougette (Latin/French/Germen/Greek)
2. __________ is an example of direct tax. (Excise duty/ Wealth tax/ Sales tax/ Gifts)
3. When Government revenue exceeds, government expenditure it is known as __________ budget. (surplus/balanced/deficit/unbalanced)
4. During depression, __________ budget is preferable. (balanced/surplus/deficit/zero)

Answer 1

1. The term budget is derived from French word Bougette.
Explanation:
‘Bougette’ is a french word meaning a bag, or a wallet containing financial proposals. The term budget has been derived from this. A budget is a financial statement showing item-wise expected government receipts and government payments during a financial year.

2. Wealth tax is an example of direct tax.
Explanation:
Direct taxes are those taxes which are borne by the person on whom they are imposed. Since a wealth tax is directly imposed on the wealth of an individual, and the burden of this tax cannot be shifted to other, it is an example of direct tax.

3. When Government revenue exceeds, government expenditure it is known as surplus budget.
Explanation:
Surplus budget refers to the excess of government revenue over the expenditure. In other words, when the government revenue is greater than its expenditure, it is called a surplus budget.
That is,
Surplus budget = Government revenue – Government expenditure

4. During depression, deficit budget is preferable.
Explanation:
Deficit budget is a situation where the government expenditure exceeds its receipts. This kind of budget is preferable at the time of depression as during depression, the output and economic activities are low causing unemployment in the country. In order to solve this problem, the government can increase expenditure for productive purposes and and use it for generating employment opportunities. This will help in increasing demand for goods and services and lowering unemployment.