Worksheet: Government Budget and the Economy - 3 | Economics Class 12 - Commerce PDF Download

Fill in the Blanks

Q1: Revenue receipts create _______ or decrease in assets.

Q2: _______ tax is borne by the end consumer.

Q3: Fiscal deficit excludes _______ from total receipts.

Q4: Revenue deficit indicates government overspending on _______.

Q5: Primary deficit helps in understanding borrowings used for purposes other than _______.

Q6: _______ policy is used to influence the country's economy through expenditure and tax rates.

Q7: Revenue deficit sends a warning signal to the government to _______ spending or boost revenue.

Q8: Capital expenditure is used for acquiring _______ assets.

Q9: A significant revenue shortfall indicates budgetary _______.

Q10: Government borrows money to cover deficits through _______ issuance.

Assertion and Reason Based

Q1: Assertion: Fiscal deficit may lead to inflationary pressures.
Reason: Increased government spending without adequate revenue generation can lead to an increase in the money supply, causing inflation.
(a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.

Q2: Assertion: Revenue deficit indicates the government is dissaving.
Reason: Revenue deficit signifies the government is using savings from other sectors of the economy to fund its current expenditure.
(a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.

Q3: Assertion: Capital budget includes transactions from the Public Account.
Reason: Public Account deals with transactions that do not have a direct effect on the Consolidated Fund of India.
(a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.

Q4: Assertion: Fiscal policy influences inflation, employment, and currency value.
Reason: Fiscal policy involves changes in government expenditure and tax rates to impact the economy.
(a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.

Q5: Assertion: Capital expenditures are one-time investments made by the government.
Reason: Capital expenditures include costs incurred for daily operations.
(a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.

Very Short Answers Type Questions

Q1: Explain revenue deficit in one sentence.

Q2: What is the primary deficit?

Q3: Name one example of indirect tax.

Q4: Define fiscal deficit.

Q5: What is the purpose of capital budget?

Q6: Explain fiscal policy in a sentence.

Q7: How does revenue deficit affect the economy?

Q8: Name one source of capital receipts for the government.

Q9: What does the fiscal deficit exclude from total receipts?

Q10: Define debt.

Short Answer Type Questions

Q1: Explain the implications of a significant revenue deficit on the government.

Q2: Describe the components of the revenue budget.

Q3: What are the measures to correct a budgetary deficit?

Q4: Explain the concept of fiscal deficit and its implications.

Q5: Differentiate between revenue deficit and fiscal deficit.

Q6: What is the role of fiscal policy in economic stability?

Q7: Explain the implication of primary deficit.

Q8: Describe the components of the capital budget.

Long Answer Type Questions

Q1: Explain the concept of budget deficit and its implications on the economy.

Q2: Discuss the significance of fiscal policy in shaping an economy.

Q3: Explain the role of debt in government financing and its impact on the economy.

Q4: Describe the measures that can be taken to correct different deficits in the government budget.