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All questions of Public Expenditure for Class 10 Exam

What is the difference between primary and secondary expenditure?
  • a)
    Primary expenditure is related to economic growth, while secondary is not
  • b)
    Primary expenditure is optional, while secondary is mandatory
  • c)
    Primary expenditure focuses on law and order, while secondary focuses on health and education
  • d)
    There is no difference; they are the same
Correct answer is option 'C'. Can you explain this answer?

Nk Classes answered
Primary expenditure primarily relates to essential services that ensure law and order, such as police and civil administration, while secondary expenditure includes spending on important services like health and education. This distinction highlights the different focuses of government spending in terms of immediate security versus long-term development.
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Which type of expenditure is related to promoting commercial activities within a country?
  • a)
    Obligatory Expenditure
  • b)
    Commercial Expenditure
  • c)
    Developmental Expenditure
  • d)
    Protective Expenditure
Correct answer is option 'B'. Can you explain this answer?

Nk Classes answered
Commercial expenditure is specifically focused on promoting and supporting commercial activities. This includes expenses for industrial exhibitions and financial incentives known as bounties, which aim to encourage specific commercial ventures and stimulate economic activity.

What is the impact of public expenditure on income inequality?
  • a)
    It has no effect on income inequality
  • b)
    It only affects wealth distribution
  • c)
    It reduces income inequality
  • d)
    It increases income inequality
Correct answer is option 'C'. Can you explain this answer?

EduRev Class 10 answered
Public expenditure can help reduce income inequality through welfare programs such as education and healthcare services, which provide support to underprivileged segments of society. By improving access to essential services, the government aims to level the playing field for all citizens.

Which type of expenditure is mandatory for the government?
  • a)
    Transfer Expenditure
  • b)
    Optional Expenditure
  • c)
    Variable Expenditure
  • d)
    Obligatory Expenditure
Correct answer is option 'D'. Can you explain this answer?

EduRev Class 10 answered
Obligatory expenditure refers to mandatory spending that the government must undertake, such as defense and contractual payments. This type of expenditure is essential for fulfilling the government’s legal and social obligations.

What event significantly impacted the rise in public expenditure post-World War II?
  • a)
    Economic recession
  • b)
    Decrease in military spending
  • c)
    Rise in prices
  • d)
    Increased urbanization
Correct answer is option 'C'. Can you explain this answer?

Kamna Science Academy answered
Post-World War II, there was a consistent rise in price levels, which significantly impacted public expenditure. The government needed to spend more to acquire goods and services and to adjust salaries for government employees in response to inflation, leading to increased overall spending.

What causes the growth of public expenditure in a democratic society?
  • a)
    Decrease in government services
  • b)
    Lower demand for public services
  • c)
    Expansion of administrative machinery
  • d)
    Reduction in social welfare programs
Correct answer is option 'C'. Can you explain this answer?

EduRev Class 10 answered
The growth of public expenditure in a democratic society is often linked to the expansion of administrative machinery and efforts to maximize social and economic welfare. As democratic principles promote the need for more services and benefits, public expenditure tends to rise.

Which of the following is an example of optional expenditure?
  • a)
    Contractual payments
  • b)
    Defence spending
  • c)
    Funding for public health
  • d)
    Investment in education
Correct answer is option 'D'. Can you explain this answer?

Kamna Science Academy answered
Investment in education is considered optional expenditure, as it is not legally mandated but rather based on government priorities. Unlike obligatory expenditures, which are necessary for fulfilling contractual or legal responsibilities, optional expenditures reflect choices in funding areas deemed important for societal development.

What is protective expenditure primarily concerned with?
  • a)
    National security and law enforcement
  • b)
    Providing social welfare
  • c)
    Supporting commercial activities
  • d)
    Economic growth through infrastructure
Correct answer is option 'A'. Can you explain this answer?

Nk Classes answered
Protective expenditure is primarily concerned with national security and law enforcement. This includes spending on defense, police services, and correctional facilities, which are essential for maintaining the safety and sovereignty of the nation.

Which of the following expenditures does NOT directly contribute to economic productivity?
  • a)
    Productive Expenditure
  • b)
    Capital Expenditure
  • c)
    Developmental Expenditure
  • d)
    Protective Expenditure
Correct answer is option 'D'. Can you explain this answer?

Kamna Science Academy answered
Protective expenditure, while crucial for maintaining law and order, does not directly contribute to increasing economic productivity. Unlike productive expenditure, which enhances output, protective expenditure focuses on security and stability.

Which of the following is an example of transfer expenditure?
  • a)
    Paying for military supplies
  • b)
    Providing old-age pensions
  • c)
    Funding road construction
  • d)
    Building a school
Correct answer is option 'B'. Can you explain this answer?

EduRev Class 10 answered
Transfer expenditure does not correspond to any specific productive service and includes payments such as old-age pensions. This type of spending is aimed at providing financial support to individuals rather than funding direct services or infrastructure.

What is the primary focus of unproductive expenditure?
  • a)
    Generating revenue
  • b)
    Ensuring stability and security
  • c)
    Promoting economic development
  • d)
    Increasing output
Correct answer is option 'B'. Can you explain this answer?

EduRev Class 10 answered
The primary focus of unproductive expenditure is ensuring stability and security. While necessary for maintaining law and order, such expenditures do not directly contribute to increasing the output of goods and services, highlighting their role in sustaining societal order rather than economic productivity.

Which of the following types of expenditure is primarily concerned with enhancing production capacity?
  • a)
    Developmental Expenditure
  • b)
    Transfer Expenditure
  • c)
    Protective Expenditure
  • d)
    Unproductive Expenditure
Correct answer is option 'A'. Can you explain this answer?

Kamna Science Academy answered
Developmental expenditure is primarily concerned with enhancing production capacity through investments in infrastructure and services that promote economic growth. This type of spending is crucial for fostering an environment conducive to business and industry development.

What is a consequence of rising public expenditure on welfare benefits?
  • a)
    Improved public services
  • b)
    Increased government debt
  • c)
    Decreased economic stability
  • d)
    Higher taxation
Correct answer is option 'A'. Can you explain this answer?

EduRev Class 10 answered
Rising public expenditure on welfare benefits typically leads to improved public services as the government allocates more funds to support essential services like healthcare, education, and social safety nets. This enhances the overall quality of life for citizens.

What is developmental expenditure aimed at?
  • a)
    Administrative services
  • b)
    Economic and social development
  • c)
    Paying off government debt
  • d)
    Maintaining law and order
Correct answer is option 'B'. Can you explain this answer?

Kamna Science Academy answered
Developmental expenditure is aimed at promoting economic and social development. This includes investments in infrastructure projects, education, and health services that enhance the overall welfare of society and contribute to sustainable growth.

Which type of expenditure increases with the level of public service usage?
  • a)
    Transfer Expenditure
  • b)
    Variable Expenditure
  • c)
    Constant Expenditure
  • d)
    Obligatory Expenditure
Correct answer is option 'B'. Can you explain this answer?

Kamna Science Academy answered
Variable expenditure increases with the level of public service usage. For example, costs for postal and telecommunications services rise as more citizens utilize these services, reflecting the direct relationship between service demand and expenditure.

What is the primary purpose of public expenditure?
  • a)
    To support the welfare and development of the nation
  • b)
    To spend funds on luxury projects
  • c)
    To reduce the budget deficit
  • d)
    To increase government revenue
Correct answer is option 'A'. Can you explain this answer?

Nk Classes answered
The primary purpose of public expenditure is to support the welfare and development of the nation. This involves funding essential services such as infrastructure, education, and healthcare, which are crucial for enhancing the quality of life and promoting economic growth. Public expenditure plays a significant role in ensuring that the basic needs of society are met.

What characterizes capital expenditure?
  • a)
    It leads to the creation of capital assets
  • b)
    It is incurred to maintain existing services
  • c)
    It is a type of voluntary spending
  • d)
    It involves transfer payments to individuals
Correct answer is option 'A'. Can you explain this answer?

Nk Classes answered
Capital expenditure is characterized by the investment made to create capital assets, which leads to the formation of capital stock. This type of spending is crucial for infrastructure projects, such as building roads and bridges, which promote long-term economic development.

How does urbanization affect public expenditure?
  • a)
    Has no impact on public expenditure
  • b)
    Reduces government revenue
  • c)
    Decreases the need for public services
  • d)
    Leads to higher public spending on civil services
Correct answer is option 'D'. Can you explain this answer?

Nk Classes answered
Urbanization tends to lead to higher public spending on civil services such as education, healthcare, and infrastructure. As populations grow in urban areas, the demand for these services increases, prompting governments to allocate more funds to meet the needs of urban residents.

How does public expenditure influence aggregate demand?
  • a)
    It decreases consumer spending
  • b)
    It has no effect on demand
  • c)
    It encourages producers to increase production levels
  • d)
    It only affects government services
Correct answer is option 'C'. Can you explain this answer?

Kamna Science Academy answered
Public expenditure influences aggregate demand by increasing it, which encourages producers to ramp up production levels. As government spending rises, it leads to higher demand for goods and services, prompting businesses to expand their production capacity and hire more workers.

Which of the following is an example of revenue expenditure?
  • a)
    Investing in renewable energy projects
  • b)
    Purchasing military equipment
  • c)
    Building a new highway
  • d)
    Funding for public health services
Correct answer is option 'D'. Can you explain this answer?

Nk Classes answered
Revenue expenditure refers to the spending required to run government departments and maintain services without creating capital assets. Funding for public health services is a clear example of revenue expenditure, as it involves ongoing costs necessary for delivering health services to the public.

Chapter doubts & questions for Public Expenditure - Economics Class 10 ICSE 2025 is part of Class 10 exam preparation. The chapters have been prepared according to the Class 10 exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for Class 10 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.

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