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Answer the following question.
How are capital expenditure different from Revenue expenditure? Discuss briefly.
Concept: Classification of Expenditure
Answer the following question:
The market for a good is in equilibrium. How would an increase in an input price affect the equilibrium price and equilibrium quantity, keeping other factors constant? Explain using a diagram.
Concept: Equilibrium Price
Define "Trade surplus" and "Trade Deficit".
Concept: Types of Budget
Compare the trends depicted in the figures given below:
| Figure 1: Trends in Fiscal deficit and Primary deficit |
Figure 2: Fiscal deficit as a percent of Budget estimate |
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Concept: Measures of Government Deficit
‘Under the Ayushmaan Bharat Scheme, the Government provides free medicines to the economically backward section of the society’.
Identify and discuss the nature of the government expenditure indicated in the given statement.
Concept: Classification of Expenditure
On the basis of the given information, calculate the value of:
- Fiscal deficit
- Primary deficit
| S.No. | Items | 2021-22 (₹ in crore) |
| (i) | Revenue Receipts | 20 |
| (ii) | Capital Expenditure | 15 |
| (iii) | Revenue Deficit | 10 |
| (iv) | Non-debt creating capital receipts | 50% of revenue receipts |
| (v) | Interest Payments | 4 |
Concept: Measures of Government Deficit
State any two features of public goods.
Concept: Objectives of Government Budget
Read the following statements carefully:
Statement 1: Export of financial services by India will be recorded on credit side of current account.
Statement 2: Foreign Direct Investments in India will be recorded on credit side of capital account.
In the light of the given statements, choose the correct alternative:
Concept: Concept of Balance of Payments >> Current Account
As per the Reserve Bank of India (RBI) press report, dated 29th December, 2022:
"Net external commercial borrowings to India recorded an outflow of US$ 0.4 billion in the second quarter (2022-23)"
The above transaction will be recorded in the _______ account on ______ side of Balance of payments account of India.
Concept: Concept of Balance of Payments >> Capital Account
Read the following chart carefully and choose the correct alternative:
Concept: Concept of Balance of Payments >> Capital Account
‘Current account deficit in an economy must be financed by a corresponding capital account surplus’.
Do you agree with the given statement? Give valid reason(s) in support of your answer.
Concept: Concept of Balance of Payments >> Balance of Payments Surplus and Deficit
Identify the correct reason(s) that may affect the demand for foreign exchange in an economy.
- Imports of visibles
- Exports of invisibles
- Remittances by residents working abroad
- Purchase of assets abroad
Concept: Foreign Exchange Rate
