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Questions and Answers
What is the correct way to calculate Primary deficit?
What is the correct way to calculate Primary deficit?
- Fiscal Deficit minus Interest Payments (correct)
- Fiscal Deficit plus Borrowing
- Total Revenue minus Expenditures
- Total Expenditures plus Revenue Deficit
Which type of expenditure does government spending on defense items represent?
Which type of expenditure does government spending on defense items represent?
- Revenue Expenditure (correct)
- Capital Expenditure
- Fiscal Expenditure
- Current Expenditure
How is Fiscal Deficit calculated?
How is Fiscal Deficit calculated?
- Total liabilities minus government receipts
- Total borrowings plus interest payments
- Total estimated expenditure less total estimated non-debt receipts (correct)
- Total revenue receipts minus asset reductions
Which of the following is a fiscal measure to reduce economic disparity?
Which of the following is a fiscal measure to reduce economic disparity?
Which statement is true about revenue receipts?
Which statement is true about revenue receipts?
Is the statement 'Government Budget is an important monetary policy instrument.' true or false?
Is the statement 'Government Budget is an important monetary policy instrument.' true or false?
Which of the following best defines Capital Receipts?
Which of the following best defines Capital Receipts?
What is a primary deficit characterized by?
What is a primary deficit characterized by?
What distinguishes non-debt creating capital receipts from other capital receipts?
What distinguishes non-debt creating capital receipts from other capital receipts?
What is the primary objective of the Ujjwala Yojana as indicated in the information provided?
What is the primary objective of the Ujjwala Yojana as indicated in the information provided?
How does the government use higher taxes to influence resource allocation?
How does the government use higher taxes to influence resource allocation?
Which statement correctly describes an effect of providing essential food items at low cost to impoverished families?
Which statement correctly describes an effect of providing essential food items at low cost to impoverished families?
Which objective does increasing infrastructure expenditure primarily serve, according to the provided statements about government budgets?
Which objective does increasing infrastructure expenditure primarily serve, according to the provided statements about government budgets?
What common outcome is associated with taxes imposed on liquor, according to the objectives of the government budget?
What common outcome is associated with taxes imposed on liquor, according to the objectives of the government budget?
Which option best represents an approach the government does NOT use to fulfill budgetary objectives?
Which option best represents an approach the government does NOT use to fulfill budgetary objectives?
In what way does the Ujjwala Yojana financially benefit lower-income households?
In what way does the Ujjwala Yojana financially benefit lower-income households?
What is one expected outcome of raising income tax on income above Rupee one crore?
What is one expected outcome of raising income tax on income above Rupee one crore?
Which budgetary measure directly aims at decreasing income inequality?
Which budgetary measure directly aims at decreasing income inequality?
What is the primary effect of raising income tax on incomes above rupees one crore?
What is the primary effect of raising income tax on incomes above rupees one crore?
What is one potential impact of government borrowings if used for infrastructure development?
What is one potential impact of government borrowings if used for infrastructure development?
Increasing government expenditure on public goods is intended to improve what aspect of economic welfare?
Increasing government expenditure on public goods is intended to improve what aspect of economic welfare?
What is the formula to calculate budgetary deficit based on the provided data?
What is the formula to calculate budgetary deficit based on the provided data?
What is the effect of increasing Goods and Services Tax (GST) on cigarettes?
What is the effect of increasing Goods and Services Tax (GST) on cigarettes?
Which of the following best describes fiscal deficit?
Which of the following best describes fiscal deficit?
Spending on education and health for the poor primarily aims to achieve what?
Spending on education and health for the poor primarily aims to achieve what?
What is one major reason for providing budgetary incentives to investors in backward regions?
What is one major reason for providing budgetary incentives to investors in backward regions?
How does increasing tax rates on higher income groups contribute to government welfare objectives?
How does increasing tax rates on higher income groups contribute to government welfare objectives?
What is the possible economic rationale behind increasing government expenditure?
What is the possible economic rationale behind increasing government expenditure?
Why might an increase in taxation for higher earners be a politically sensitive issue?
Why might an increase in taxation for higher earners be a politically sensitive issue?
What type of tax is income tax classified as?
What type of tax is income tax classified as?
Which of the following is an intended outcome of raising income tax on high earners?
Which of the following is an intended outcome of raising income tax on high earners?
Which economic value is reflected by the government's increased spending on free services for the poor?
Which economic value is reflected by the government's increased spending on free services for the poor?
What is the Fiscal Deficit calculated from the first data set?
What is the Fiscal Deficit calculated from the first data set?
How is the Primary Deficit computed in the first example?
How is the Primary Deficit computed in the first example?
What is the amount of Interest Payments derived from the Revenue Deficit?
What is the amount of Interest Payments derived from the Revenue Deficit?
What value represents the Revenue Deficit in the first example?
What value represents the Revenue Deficit in the first example?
From the second data set, what is the result of the Fiscal Deficit calculation?
From the second data set, what is the result of the Fiscal Deficit calculation?
Which components are involved in calculating the Revenue Deficit in the second provided data set?
Which components are involved in calculating the Revenue Deficit in the second provided data set?
In the first problem, what is the total Revenue Receipts amount?
In the first problem, what is the total Revenue Receipts amount?
What is the primary component deducted from the Fiscal Deficit to find the Primary Deficit?
What is the primary component deducted from the Fiscal Deficit to find the Primary Deficit?
Study Notes
Government Budget
- Primary deficit is calculated by subtracting interest payments from the fiscal deficit.
- Revenue expenditure includes government spending on defense items and mid-day meal schemes.
- Taxation and subsidies are fiscal measures that can be used to reduce inequality.
- Capital receipts are receipts that create liabilities or reduce government assets.
- Profits of public enterprises are considered revenue receipts for the government.
- The government budget is an important fiscal policy instrument, not monetary policy.
- Ujjwala Yojana is an example of revenue expenditure, not capital expenditure as it does not create assets or reduce liabilities.
- Fiscal deficit refers to the difference between government's total estimated expenditure and total estimated non-debt receipts in a fiscal year.
- Progressive taxation and increased government expenditure are two budgetary measures to reduce income inequality.
- Budgetary incentives include tax concessions and subsidies to encourage investment in backward regions.
- Budgetary deficit represents the difference between total expenditure and total receipts, excluding borrowing.
- Non-debt creating capital receipts are capital receipts excluding borrowings. Examples include disinvestment and recovery of loans.
- Free LPG gas connections under Ujjwala Yojana aim to reduce inequality by providing subsidized services to families below the poverty line.
- Government budget can influence resource allocation through taxation, expenditure and subsidies.
- Providing essential food grains to underprivileged families aims to reduce inequality by utilizing revenue collected from wealthier citizens.
- Government budget objectives can include reallocation of resources, economic stability, reducing income and wealth inequality, and infrastructure development.
- Revenue deficit is calculated by subtracting revenue receipts from revenue expenditure.
- Fiscal deficit is calculated by subtracting total revenue receipts, excluding borrowings, from total expenditure.
- Primary deficit can be calculated by subtracting interest payments from fiscal deficit.
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Description
Test your knowledge on key concepts related to government budgeting, including primary deficit, revenue expenditure, and fiscal policies. Explore how taxation and subsidies can impact income inequality and the significance of capital receipts in the budgetary process.
