Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

Match List-I with List-II.

List-I List-II
(A) Non-tax Revenue receipts (I) Capital Receipts
(B) Interest payments on debt (II) Revenue Expenditure
(C) Recovery of loans (III) Capital Expenditure
(D) Investment in shares by government (IV) Dividends and profits of government

Choose the correct answer from the options  given below :

Options:

(A)-(IV), (B)-(I), (C)-(III), (D)-(II)

(A)-(IV), (B)-(II), (C)-(I), (D)-(III)

(A)-(II), (B)-(IV), (C)-(I), (D)-(III)

(A)-(III), (B)-(I), (C)-(IV), (D)-(II)

Correct Answer:

(A)-(IV), (B)-(II), (C)-(I), (D)-(III)

Explanation:

The correct answer is option (2) : (A)-(IV), (B)-(II), (C)-(I), (D)-(III)

The correct match is :

(A) Non-tax Revenue receipts : (IV) Dividends and profits of government

(B) Interest payments on debt : (II) Revenue Expenditure

(C) Recovery of loans : (I) Capital Receipts

(D) Investment in shares by government : (III) Capital Expenditure

Non-tax Revenue receipts (A): These are income sources for the government that are not taxes. Dividends and profits from government-owned companies fall under this category.
Interest payments on debt (B): This is an expense incurred by the government for borrowing money. It's a revenue expenditure, which refers to the day-to-day running expenses of the government.
Recovery of loans (C): When the government recovers loans it has given out, it receives capital back. This is classified as a capital receipt.
Investment in shares by government (D): When the government invests in shares of companies, it's spending capital on assets. This is considered capital expenditure.