Which of the following is NOT an example

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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

Which of the following is NOT an example of capital expenditure?

Options:

Subsidies given to state government

Investment in shares

Loan by central government to state government

Repayment of loan

Correct Answer:

Subsidies given to state government

Explanation:

Subsidies given to state government neither creates assets nor causes a reduction in liabilities. They are part of revenue expenditure.