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NCERT solutions for Class 12 Economics chapter 5 - Government Budget And The Economy

Class 12 Economics - Introductory Macroeconomics

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Chapters

NCERT Class 12 Economics - Introductory Macroeconomics

Class 12 Economics - Introductory Macroeconomics - Shaalaa.com

Chapter 5: Government Budget And The Economy

Exercise

Chapter 5: Government Budget And The Economy Exercise Exercise solutions [Pages 83 - 84]

Exercise | Q 1 | Page 83

Explain why public goods must be provided by the government.

Exercise | Q 2 | Page 83

Distinguish between revenue expenditure and capital expenditure.

Exercise | Q 3 | Page 83

‘The fiscal deficit gives the borrowing requirement of the government’. Elucidate.

Exercise | Q 4 | Page 83

Give the relationship between the revenue deficit and the fiscal deficit.

Exercise | Q 5 | Page 83

Suppose that for a particular economy, investment is equal to 200, government purchases are 150, net taxes (that is lump-sum taxes minus transfers) is 100 and consumption is given by C = 100 + 0.75Y (a) What is the level of equilibrium income? (b) Calculate the value of the government expenditure multiplier and the tax multiplier. (c) If government expenditure increases by 200, find the change in equilibrium income.

Exercise | Q 6 | Page 84

Consider an economy described by the following functions:- C = 20 + 0.80Y, I = 30, G = 50, TR = 100 (a) Find the equilibrium level of income and the autonomous expenditure multiplier in the model. (b) If government expenditure increases by 30, what is the impact on equilibrium income? (c) If a lump-sum tax of 30 is added to pay for the increase in government purchases, how will equilibrium income change?

Exercise | Q 7 | Page 84

Consider an economy described by the following functions:- C = 20 + 0.80Y, I = 30, G = 50, TR = 100, calculate the effect on output of a 10 per cent increase in transfers, and a 10 per cent increase in lump-sum taxes. Compare the effects of the two.

Exercise | Q 8 | Page 84

We suppose that C = 70 + 0.70Y D, I = 90, G = 100, T = 0.10Y (a) Find the equilibrium income. (b) What are tax revenues at equilibrium Income? Does the government have a balanced budget?

Exercise | Q 9 | Page 84

Suppose marginal propensity to consume is 0.75 and there is a 20 per cent proportional income tax. Find the change in equilibrium income for the following (a) Government purchases increase by 20 (b) Transfers decrease by 20.

Exercise | Q 10 | Page 84

Explain why the tax multiplier is smaller in absolute value than the government expenditure multiplier.

Exercise | Q 11 | Page 84

Explain the relation between government deficit and government debt.

Exercise | Q 12 | Page 84

Does public debt impose a burden? Explain.

Exercise | Q 13 | Page 84

Are fiscal deficits inflationary?

Exercise | Q 14 | Page 84

Discuss the issue of deficit reduction.

Exercise | Q 15 | Page 84

What do you understand by G.S.T? How good is the system of G.S.T as compared to the old tax system? State its categories.

Chapter 5: Government Budget And The Economy

Exercise

NCERT Class 12 Economics - Introductory Macroeconomics

Class 12 Economics - Introductory Macroeconomics - Shaalaa.com

Textbook solutions for Class 12






















NCERT solutions for Class 12 Economics chapter 5 - Government Budget And The Economy

NCERT solutions for Class 12 Economics chapter 5 (Government Budget And The Economy) include all questions with solution and detail explanation. This will clear students doubts about any question and improve application skills while preparing for board exams. The detailed, step-by-step solutions will help you understand the concepts better and clear your confusions, if any. Shaalaa.com has the CBSE Class 12 Economics - Introductory Macroeconomics solutions in a manner that help students grasp basic concepts better and faster.

Further, we at Shaalaa.com provide such solutions so that students can prepare for written exams. NCERT textbook solutions can be a core help for self-study and acts as a perfect self-help guidance for students.

Concepts covered in Class 12 Economics chapter 5 Government Budget And The Economy are Meaning of Government Budget, Objectives of Government Budget, Components of Budget, Classification of Receipts, Classification of Expenditure, Types of Budget, Types of Budget - Budget Deficit, Measures of Government Deficit Or Surpluses, Direct and Indirect Tax, Government Budget - Allocation of Resources, Deficit Budget - Primary Deficit, Meaning of Disinvestment.

Using NCERT Class 12 solutions Government Budget And The Economy exercise by students are an easy way to prepare for the exams, as they involve solutions arranged chapter-wise also page wise. The questions involved in NCERT Solutions are important questions that can be asked in the final exam. Maximum students of CBSE Class 12 prefer NCERT Textbook Solutions to score more in exam.

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