Here we are providing 1 Mark Questions for Economics Class 12 Chapter 5 Government Budget and the Economy are the best resource for students which helps in class 12 board exams.
One Mark Questions for Class 12 Economics Chapter 5 Government Budget and the Economy
Define government budget. (C.B.S.E 2013,2014,2017)
The government budget is an annual statement of the estimated receipts and expenditure of the government over the fiscal year, which runs from April 1 to March 31.
State any one objective of government budget.
One of the primary objectives of the government budget is to mobilise resources for the purpose of rapid development.
Define surplus budget.
A surplus budget is the one where the estimated revenues of the government are greater than the estimated expenditures,
Define a balanced budget.
A balanced budget is the one where the estimated revenue of the government equals the estimated expenditure.
Define a deficit budget.
A deficit budget is the one where the estimated revenue of the government is less than the estimated expenditure.
What is revenue expenditure?
Revenue expenditure refers to that expenditure by the government, which neither creates assets for the government nor reduces its liabilities. For example, old age pension.
Define capital expenditure.
Capital expenditure refers to that expenditure by the government, which either creates assets for the government or reduces its liabilities.
Define a tax. (C.B.S.E. 2012,2019)
Tax is a compulsory payment made by an individual or an institution to the government without anything in exchange
State any two sources of non-tax revenue receipts. (C.B.S.E 2011 Comp.)
The two sources of non-tax revenue receipts are:
(i) Income from investment made by the government
(ii) Fees and fines received by the government
Why is entertainment tax an indirect tax?
The entertainment tax is an indirect tax because the seller of the service passes the burden of tax on to the buyer of the service.
Fines are amounts levied for an infringement of a law.
Define fiscal discipline.
Fiscal discipline means having control over expenditures, given the quantum of revenues.
Define Direct tax (C.B.S.E. Outside Delhi 2012,2019)
Direct taxes are those taxes levied immediately on the property and income of persons, and are paid [ by-the consumers to the state.
Give Area examples of direct taxes. (C.B.S.E.20I0)
Following are the three examples of direct tax-
(i) Income Tax
(ii) Wealth Tax
(iii) Interest Tax
What do you mean by an indirect tax? (C.B.S.E. Outside Delhi 2019)
Indirect tax is a tax collected by an intermediary (seller) from the person who bears the ultimate economic burden of the tax (buyer), Its burden can be shifted by the tax payer on someone else.
Define GST (C.B.S.E. 2013)
GST’ is a value-added tax paid by the consumers and remitted to the government by the seller of various goods and service
Give two examples of fees.
Following are the three examples of fees:
(i) College fees in government colleges
(ii) License fees
Fee refers to a payment to defray the cost of each recurring service undertaken by the government but conferring a special advantage on the fee payer.
State any two items of revenue expenditure in a Government budget. (C.B.S.E. 2019)
Defence expenditure and expenditure on social services.
Indicate two heads of government expenditure on capital account.
Acquisition of land or buildings, acquisition of plant machinery or equipment.
Write two heads of government development expenditure.
Expenditure on economic services like agriculture, industry, etc., expenditure on education or health.
Point out two heads of non-development government expenditure.
Defence expenditure and payments on administrative services.
What is meant by revenue deficit? (C.B.S.E 2004,09, 10,2017), (C.B.S.E. Outside Delhi 2013)
Revenue deficit in the government budget represents the excess of current revenue expenditure over the current revenue receipts.
Define primary deficit. (C.B.S.E. 2004,2009,2017,2019)
Primary deficit is the difference between fiscal deficit and interest payments. It indicates how much of the government borrowing is going to meet expenses, other than interest payments.
What is meant by fiscal deficit? (C.B.S.E. 2004,05,09,2017,2019)
Fiscal deficit is the difference between the total expenditure of the government and the revenue receipts plus the capital receipts, which are not in the nature of borrowing, but which finally accrue to the government.
How is primary deficit calculated? (C.fi.S.E 2010), (C.B.S.E Outside Delhi 2011 Comp.)
Primary deficit is calculated as:
Primary deficit = Fiscal deficit – Interest payment.