What is a government budget? Give the meaning of: (a) Revenue deficit; (b) Fiscal deficit.

Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Short Questions – Q.6 What is a government budget? Give the meaning of: (a) Revenue deficit; (b) Fiscal deficit.

Solution:-

Government Budget is a yearly statement showing estimated receipts as well as estimated expenditures of the government for a financial/Fiscal year.

Revenue deficit is a situation where governments revenue expenditure exceeds its revenue receipts. This implies government’s inability to meet its regular expenditure out of its regular income.

Fiscal deficit refers to a situation where Governments total expenditure is greater than its total receipts net of borrowings (excluding borrowings).

Short Questions – Sandeep Garg Macroeconomics Class 12 Solutions Government budget and the Economy

• State three objectives of a government budget
• Explain objective of stability of prices of government budget
• How can a government budget help in reducing inequalities reducing inequalities of income? Explain.
• Explain the ‘allocation of resources’ objective of Government budget.
• What is a government budget? Name two sources each of non-tax revenue receipts and capital Receipts.
• What is a government budget? Give the meaning of: (a) Revenue deficit; (b) Fiscal deficit.
• What are the two broad divisions of receipts of the government budget? Name two sources of each kind of receipt.
• Define tax revenue. What are the two kinds of tax revenues? Give two examples of each.
• Distinguish between Direct Tax and Indirect Tax
• Explain with the help of suitable examples the basis of classifying taxes into direct and indirect taxes
• Distinguish between revenue receipts and capital receipts
• Give meanings of Capital receipts and Revenue receipts with an example of each.