What is meant by budget expenditure? Distinguish between revenue expenditure and capital expenditure.

Question 3. What is meant by budget expenditure? Distinguish between revenue expenditure and capital expenditure.
Class  Class 12
Subject Economics (Macroeconomics)
Category Class 12 Economics Solutions Sandeep Garg

Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Long Questions Q.3 What is meant by budget expenditure? Distinguish between revenue expenditure and capital expenditure.

Solution:

Budget expenditure refers to the estimated expenditure of government during a financial/fiscal year.




Basis Revenue Expenditure Capital Expenditure
Meaning Revenue expenditure are those recurring expenditures of the Government which neither reduces its liabilities or creates an asset for the government. Capital Expenditures are those non-recurring expenditures of the government which results in reduction of its liabilities or creation of an asset for the government.
Nature It is recurring in nature It is non-recurring in nature.
Example Salary, interest etc. Purchase of land, borrowings etc.

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

Sandeep Garg Macroeconomics Class 12 Solutions

Part A: Introductory Macroeconomics
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