| Question | 4. Explain the ‘allocation of resources’ objective of Government budget. |
| Class | Class 12 |
| Subject | Economics (Macroeconomics) |
| Category | Class 12 Economics Solutions Sandeep Garg |
Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Short Questions – Q.4 Explain the ‘allocation of resources’ objective of Government budget.
“OR”
Elaborate the objective of ‘reallocation of resources in the government budget.
“OR”
Explain how government can influence allocation of resources through government budget.
“OR”
Through its budgetary policy, government allocates resources in accordance with the requirements of the country.” Do you agree with the give statement? Justify your answer with valid reason.
Solution:-
Government through its budgetary policy relocates resources to maintain the balance between its objectives of profit maximisation and social welfare. To achieve profit maximisation and encourage investment, government invites private players by providing tax holidays, subsidies etc. but sometime private players hesitate to take up projects requiring heavy investment and having long gestation periods such as sanitation, building of roads etc. In such a situation government takes up these projects for social welfare.
Short Questions – Sandeep Garg Macroeconomics Class 12 Solutions Government budget and the Economy
- State three objectives of a government budget
- Explain objective of stability of prices of government budget
- How can a government budget help in reducing inequalities reducing inequalities of income? Explain.
- Explain the ‘allocation of resources’ objective of Government budget.
- What is a government budget? Name two sources each of non-tax revenue receipts and capital Receipts.
- What is a government budget? Give the meaning of: (a) Revenue deficit; (b) Fiscal deficit.
- What are the two broad divisions of receipts of the government budget? Name two sources of each kind of receipt.
- Define tax revenue. What are the two kinds of tax revenues? Give two examples of each.
- Distinguish between Direct Tax and Indirect Tax
- Explain with the help of suitable examples the basis of classifying taxes into direct and indirect taxes
- Distinguish between revenue receipts and capital receipts
- Give meanings of Capital receipts and Revenue receipts with an example of each.