Class 12 Economics — Chapter 5: Government Budget and the Economy

What you'll learn

• ▸Government Budget: Meaning and Structure
• ▸Objectives: Allocation Function and Public Goods
• ▸Objectives: Redistribution Function
• ▸Objectives: Stabilisation Function
• ▸Revenue Receipts
• ▸Capital Receipts
• ▸Revenue Expenditure
• ▸Capital Expenditure
• ▸Plan and Non-Plan Expenditure

Chapter Summary

--- PAGE 1 --- Chapter 5 1210SCH05 Government Budget and the Economy We introduced the government in chapter one as denoting the state. We stated that apart from the private sector, there is the government which plays a very important role. An economy in which there is both the private sector and the Government is known as a **mixed economy**. There are many ways in which the government influences economic life. In this chapter, we will limit ourselves to the functions which are carried on through the **government budget**. This chapter proceeds as follows. In section 5.1 we present the components of the government budget to bring out the sources of government revenue and avenues of government spending. In section 5.2 we discuss the topic of balanced, surplus or deficit budget to account for the difference between expenditures and revenue collection. It specifically deals with the meaning of different kinds of budget deficits, their implications and the measures to contain them. Box…

Practice Questions from this Chapter

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1. Define public goods easily. Get Solution →
2. List various government taxes. Get Solution →
3. How do budgets help countries? Get Solution →
4. According to the text, what is the duration of the financial year in India? Get Solution →
5. What is the official name for the main budget document presented before the Parliament of India? Get Solution →
6. An economy that includes both the private sector and the Government is known as a... Get Solution →
7. Which of the following is explicitly mentioned in the text as an example of a public good? Get Solution →
8. What term does the text use for non-paying users who enjoy the benefits of public goods? Get Solution →

Did you know?

• 💡 Ancient Romans built over 50,000 miles of roads, a vast public service network.
• 💡 The earliest known taxes were collected in ancient Egypt to build pyramids.
• 💡 Salt was once so valuable it was used as money and to pay Roman soldiers.
• 💡 The world's oldest continually operating fire department is in Boston, founded in 1678.
• 💡 A government once taxed windows, leading many people to brick them up.

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