What is the difference between revenue expenditure and capital ex

Subject

Economics

Class

CBSE Class 12

Pre Boards

Practice to excel and get familiar with the paper pattern and the type of questions. Check you answers with answer keys provided.

Sample Papers

Download the PDF Sample Papers Free for off line practice and view the Solutions online.
Advertisement

 Multiple Choice QuestionsShort Answer Type

21.

What are revenue receipts in a government budget?

649 Views

22.

Primary deficit equals: (Choose the correct alternative)
(1) (a) Borrowings (b) Interest payments (c) Borrowings less interest payments (d) Borrowings and interest payments both

752 Views

23.

Foreign exchange transactions which are independent of other transactions in the Balance of Payments Account are called:(Choose the correct alternative)
(a) Current transactions
(b) Capital transactions
(c) Autonomous transactions
(d) Accommodating transactions

810 Views

24.

What is aggregate demand? State its components.

1316 Views

Advertisement
25.

What is aggregate demand? State its components.

531 Views

26.

An economy is in equilibrium. Calculate Marginal Propensity to Consume:
National income = 1000
Autonomous consumption expenditure = 200
Investment expenditure = 100

4648 Views

27.

Sale of petrol and diesel cars is rising particularly in big cities. Analyse its impact on gross domestic product and welfare. 

1357 Views

28.

Explain the 'medium of exchange' function of money. How has it solved the related problem created by barter?

1041 Views

Advertisement
29.

Explain how 'Repo Rate' can be helpful in controlling credit creation. 

1617 Views

 Multiple Choice QuestionsLong Answer Type

Advertisement

30.

What is the difference between revenue expenditure and capital expenditure? Explain how taxes and government expenditure can be used to influence.


Basis of Difference Capital Expenditure Revenue Expenditure
Meaning A decline in the government liabilities and creates assets for the government.  No decline in government liabilities and does not create assets for the government
Examples Purchase of shares and bonds Salaries, pensions and interest payments

Taxes and government expenditure can be influenced as follows:
i. A tax is a legally compulsory payment imposed by the government on households and producers. The government imposes taxes on socially unsafe goods such as alcohol and tobacco. Thereby resources will be shifted to the production of socially essential goods.
ii. Subsidies do not reduce the liability of the government and it does not add to the assets of the government. The government also provides subsidies for necessary goods such as wheat, rice and sugar. Thereby the resources are shifted from the production of goods for the rich to the production of goods for the poor.
767 Views

Advertisement
Advertisement