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The Government : Budget And The Economy

Question
CBSEENEC12012819
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How may a deficit be financed?

Solution
A deficit may be financed: (i) by printing new currency, i.e., monetary expansion, and (ii) by borrowing from internal sources (i.e., public) and external sources (i.e., foreign govt., World Bank).

Some More Questions From The Government : Budget And The Economy Chapter

Distinguish between Direct and Indirect taxes.
or
What is the basis of classifying taxes into direct tax and indirect tax? Give an example of each. 

Classify the following into direct and indirect tax. Give reasons.
(i) Wealth tax, (ii) Entertainment tax, and (iii) Income tax. 

What is meant by Budget (Government) Expenditure? Describe its components (items).

Distinguish between revenue expenditure and capital expenditure.
or
What is the basis of classifying government expenditure into revenue expenditure and capital expenditure? 

Why are subsidies treated as revenue expenditure? 

Why is payment of interest a revenue expenditure?

Why is repayment of loan a capital expenditure? 

Giving reasons categorise the following into revenue expenditure and capital expenditure. 
(i) Subsidies, (ii) Grants, (iii) Repayment of loan, and (iv) Construction of school building.

Difference between Plan and Non-plan Expenditure.

Difference between Development and Non-development Expenditure.

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