Commerce Exam > Commerce Notes > Economics Class 12 > Worksheet: Government Budget and the Economy- 2
Worksheet: Government Budget and the Economy- 2 | Economics Class 12 - Commerce PDF Download
| Table of contents |
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| Multiple Choice Questions |
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| True and False Questions |
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| Match the Following |
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| Very Short Answers |
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| Short Answers |
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Multiple Choice Questions
Q1: Which of the following is not a component of the government budget?
(a) Revenue Receipts
(b) Capital Receipts
(c) Revenue Expenditure
(d) Household Expenditure
Q2: What does a government budget show?
(a) Surplus and Deficit
(b) Only Surplus
(c) Only Deficit
(d) None of the Above
Q3: Which of the following is a capital receipt?
(a) Borrowings
(b) Tax Revenue
(c) Grants-in-Aid
(d) Interest Receipts
Q4: What is the primary deficit of the government budget?
(a) Fiscal Deficit - Interest Payments
(b) Fiscal Deficit + Interest Payments
(c) Fiscal Deficit / Interest Payments
(d) Fiscal Deficit x Interest Payments
Q5: What is the purpose of a government budget?
(a) To Control Inflation
(b) To Promote Economic Growth
(c) To Allocate Resources Efficiently
(d) All of the Above
True and False Questions
Q1: Revenue receipts are the income generated by the government through taxes and non-tax sources.
Q2: Fiscal deficit represents the total borrowing requirements of the government from all sources.
Q3: Capital expenditure includes government spending on infrastructure projects and investments.
Q4: Revenue deficit occurs when the government's total revenue expenditure exceeds its total revenue receipts.
Q5: A budget surplus occurs when government revenue exceeds government expenditure.
Match the Following
Q1: Match the items in Column A with the appropriate options in Column B:
Very Short Answers
Q1: Explain the concept of the government budget and its importance in the economy.
Q2: What is fiscal policy, and how does it influence the government budget?
Q3: Describe the components of government expenditure. Provide examples of each component.
Q4: Briefly explain the concept of revenue deficit and its implications for the economy.
Q5: How does the government create money through its budget? Explain the process.
Short Answers
Q1: Discuss the various types of government revenue sources, highlighting their significance in budget planning. Provide examples for each source.
Q2: Explain the concept of deficit financing. What are its advantages and disadvantages in the context of the Indian economy?
Q3: Differentiate between direct and indirect taxes. Provide examples of each type and discuss their impact on different sections of society.
Q4: Evaluate the role of the government budget in promoting economic stability and growth. Provide examples from the Indian economy to support your answer.
Q5: Analyze the challenges faced by the government in managing its budgetary resources. Discuss the measures that can be taken to overcome these challenges and ensure fiscal sustainability.
You can access the solutions to this worksheet here.
The document Worksheet: Government Budget and the Economy- 2 | Economics Class 12 - Commerce is a part of the Commerce Course Economics Class 12.
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FAQs on Worksheet: Government Budget and the Economy- 2 - Economics Class 12 - Commerce
| 1. What is a government budget? |  |
Ans. A government budget is a financial plan that outlines the government's anticipated revenues and expenditures for a specific period, usually one year. It serves as a roadmap for how the government will allocate its resources to meet its financial obligations and achieve its policy objectives.
| 2. How does government spending affect the economy? | |
Ans. Government spending plays a crucial role in influencing the economy. When the government increases its spending, it injects money into the economy, stimulating demand and potentially leading to economic growth. However, excessive government spending can also lead to inflation and financial instability if not managed carefully.
| 3. What are the different sources of government revenue? | |
Ans. Governments generate revenue from various sources, including taxes (such as income tax, sales tax, and corporate tax), fees and licenses, borrowing from the market, proceeds from the sale of assets, and grants or aid from foreign countries or international organizations.
| 4. How does the government budget impact citizens? | |
Ans. The government budget has a direct impact on citizens' lives in several ways. It determines the level of public services and infrastructure available, such as healthcare, education, transportation, and public safety. It also influences the tax burden and government assistance programs, affecting individuals' disposable income and social welfare.
| 5. What is the importance of a balanced government budget? | |
Ans. A balanced government budget is crucial as it ensures that the government's expenses do not exceed its revenue. It helps maintain fiscal discipline, prevents excessive borrowing, and reduces the risk of inflation and financial instability. A balanced budget also signals responsible governance and fosters confidence among investors and creditors.
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