What are the two broad divisions of receipts of the government budget? Name two sources of each kind of receipt.

Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Short Questions – Q.7 What are the two broad divisions of receipts of the government budget? Name two sources of each kind of receipt.

Solution:-

Two broad divisions of receipts of government budget are: –

1. Revenue receipts: – Revenue receipts are those recurring receipts for the Government which neither results in reduction of its assets nor an increase in its liabilities. For example, taxes, fines received by government.
2. Capital Receipts: – Capital receipts are those estimated non-recurring receipts for the government which results in reduction of its assets or an increment in its Liabilities. For example, Sale of Government land and borrowings by government.

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.