Question

Which of the following categories belongs to capital expenditure?

• A. Defence expenditure
• B. Grants-in-aid to the states
• C. Civil expenditure
• D. Investment in shares

Answer 1

The correct option is D

Investment in shares

The expenditure of the government which leads to the creation of capital stock in the economy is referred to as capital expenditure. Capital expenditure consists of expenditure on acquisition of assets like land, buildings, investment in shares, etc.