Government Budget and The Economy

Previous Years' CBSE Board Questions

Explain how government budget can be used to

influence distribution of income? (Delhi 2017)

5.1 Meaning, Objectives and Components of Government Budget

Tax rates on higher income group have been

increased. Which economic value does it reflect?

Explain. (AI 2014)

MCO

Read the following statements carefully and choose the correct alternative.

Statement 1: Public goods are non-excludable.

Statement II: Consumption of public goods by people is of rivalrous nature.

1. Both the statements are true.
2. Statement I is true but statement II is false.
3. Both the statements are false.
4. Statement II is true but statement I is false.

(Term-I, 2021-22)

'Budget is used as an important policy instrument to combat fluctuations in an economy'. The given line shows which of the following objectives of Government Budget

1. Allocation of resources
2. Stabilisation of prices
3. Growth of the economy
4. Redistribution of income (Term-I, 2021-22)

VSA (1 mark)

1. State whether the following statement is true or false: "Government Budget is an important monetary policy instrument." (2020)

Define a government budget. (Delhi 2014, Al 2014 C)

SAI (3 marks)

1. How can budgetary policy be used in equalities of

income? (Al 2015)

SAII (4 marks)

1. "Government provides essential items like food grains almost free to the families below poverty line." Identify and explain the objective of the government

budget indicated. (2023) OR "Government has started spending more on providing free services like education and health to the poor."

In the light of above statement, explain how the government can use the budgetary policy in reducing 'inequalities of income'. (2023)

"Through its budgetary policy, the government allocates resources as per the requirements of the country." your answer with the valid reasons. (2021 C)

(5/6 marks)

What is government budget? Explain its major

components. (2018)

Explain (a) allocation of resource and (b) economic

stability as objectives of government budget. (2018)

11. What is government budget? Explain how taxes

and subsidies can be used to influence allocation of

resources? (Delhi 2016)

MCQ

5.2 Classification of Receipts in a Government Budget

1. Identify which of the following is an example of non- debt capital receipt?
2. Financial aid from MNC for victims in flood affected area.
3. Borrowings from International Monetary Fund (IMF).
4. Recovery of loans from State Governments.
5. Dividend paid by State Bank of India (SBI) to the Government. (Term-I, 2021-22)

The non-tax revenue in the following is:

1. Export duty (b) Import duty
2. Dividend (d) Excise (Delhi 2015)

Which one of the following is a combination of direct

taxes? (a) Excise duty and wealth tax

(b) Service tax and income tax

1. (d) Wealth tax and income tax (Delhi 2015 C)

Direct tax is called direct because it is collected

directly from: (a) The producers on goods produced (d)

1. (c) The buyers of goods

VSA (1 mark)

Define the term 'tax'. (2021 C, 2019) R

Do you agree with the given statement? Support 17. What are revenue receipts in a government budget? (Delhi 2016)

1. What are capital receipts in a government budget? (Al 2016)

Give two examples of revenue expenditure.

(AI 2014 C)

Give two examples of non-tax revenue receipts. (Delhi 2014 C)

1. Define an indirect tax. (Al 2014 C)
2. Is the following revenue expenditure or capital expenditure in the context of government budget? Give reason.

Give two examples of indirect taxes. (Delhi 2014 C)

(ii)

SAI (3 marks)

1. Study the given picture carefully. (Delhi 2014) An Sources of State and Local Government tax revenues for a financial year 88 Individual 8 Income Tax II Corporate .. 20% Property Income Tax Tax 3% Sales & Gross <math>(35\%)</math> Receipts Tax 34% Motor vehicle licence fee 7%

Categorise the given items in the picture into tax/ non-tax receipts. (2023) Ap

1. Distinguish between Direct Tax and Indirect Tax.

(2020)

OR Explain the basis of classifying taxes into direct and indirect tax. Give examples. (Delhi 2017)

(viii)

1. No. Items Amount (Paisa/ Rupee)
2. (ii) Income Tax 14
3. (iv) Union Excise Duties 8
4. Tax
5. (vii) Non-Debt Capital 5 Receipts

1. Categorise the following a revenue receipt or a capital receipt in the context of government budget and why?
2. Tax receipts
3. Disinvestment (AI 2014)

SAII (4 marks)

(Term-I, 2021-22) Ap

How are capital receipts different from revenue receipts? Discuss briefly. (2019) An

LA (5/6 marks)

Define revenue receipts in a government budget. Explain, how government budget can be used to bring in price stability in the economy. (Delhi 2016)

The government decides to give budgetary incentives to investors for making investments in backward regions. Explain these possible incentives and the reasons for the same. (AI 2015 C) U

5.3 Classification of Expenditure in a Government Budget

VSA (1 mark)

1. Define 'Revenue Expenditure'. (2020, Delhi 2016, Al 2016)

SAI (3 marks)

(5/6 marks)

What is the difference between revenue expenditure

and capital expenditure? Explain, how taxes and

government expenditure can be used to influence

distribution of income in the society? (Al 2016)

5.4 Balanced, Surplus and Deficit Budget

MCQ

Question 32 to 37 are to be answered on the basis of

given data and common knowledge: Budget 2021-22

What is the percentage share of total tax revenue in

government total receipts?

1. 50% (b) 53%
2. 59% (d) 45%

Identify which of the following is not an example of

non-tax revenue? Fees II. Income Tax (c)

1. Borrowings IV. Grants
2. II only (b) II and III only

If government borrowings increase, which of the

following statement will be incorrect for the current

fiscal year?

1. (b) Fiscal deficit will increase.
2. (d) Government burden for future payment will increase.