Government Budget And Economy :- So guys if wants class 12 chapter 5 macro economics Important questions then you are on right place here we provide all the important questions with answer of government Budget and Economy and all the questions are important for your exam these questions are mainly those questions those who repeated from many year exam and all these questions are repeated and previous year paper and government budget and economy important questions are mostly taken from XamIdea and Oswaal important question for class 12 so lets begin :-

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Government Budget And Economy Class 12 Important question | Download Macro Economics Chapter 5 notes

Below are most repeated questions of macro economics chapter 5 and important for your exam so must read before going in exam :-

Question :- What is meant by fiscal discipline ?

Answer :- Fiscal Discipline Means The situation when fiscal deficit is under the manageable limits and it does not lead to high increase of inflation in the country are known as fiscal discipline .

Question :- What are subsidies ?

Answer :- Subsidies is the financial help that are provided by the government to the organisation to produce a valuable good and sell them in lowest price to control equilibrium of market price .

Question :- What do you mean by revenue deficit ?

Answer :- the revenue deficit will be corrected only when if borrowing or disinvestment of occurs Accordingly revenue deficit points to compulsion for the government or either it be borrowed or it to be disinvest while borrowing fund and add to liabilities for the government these investments creates a reduction in assets does revenue deficit is a point of physical indiscipline that occurs in the country particularly when the economy is an inflationary spiral or known as revenue deficit .

Question :- Define primary deficit?

Answer :- the difference between fiscal deficit and the interest payment are known as primary deficit  .

Primary deficit = Fiscal deficit – Interest Payment

Question :- “Government across nations are too much worried about the term fiscal deficit ” . Do you think that fiscal deficit is necessarily inflationary in nature ? Support your answer with reasons .

Answer : – Physical deficit indicates boring that are taken by the government borrowing from the RBI is an important component of government ordering the increase in money supply to the economy and increase in money supply that increase the general price level and a percent increase in a general price over a period of time leads to inflation spiral are known as revenue deficit and it is like wage price spirals wage cash prices and price gauge wages and this process will growth and it raise –

• the cost of raw material
• the cost of credit of investment
• the cost of wage rate

The fiscal deficit is not necessary inflationary in nature .

According to keynes the deficit buzzed or a physical deficit is a key instrument to correct the state of depression according to him depression is the face of economy activity when the Level of investment is low level of AD and deficit budget raise the level of AD in two ways :

1. direct by the way of government expenditure
2. direct buy investment and consumption by the people .

 

Question :- Define revenue receipts in the govt budget and explain how govt budget can be used to bring in price stability in the economy ?

Answer : – revenue receipts are those receipts which do not cause any reduction in assets of the government and which do not create any liability for the government in an economy are known as revenue receipt  .

The government budget can be used by the method the method is budgetary policy of the government is used as an important policy instrument to impart the stability of the economy during recession investment can be boosted through tax breaks and subsidies deficiency of demand can be used through increase in government expenditure during the inflation  the austerity drive raise taxis and reduce the subsidies .

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FAQ : Government Budget Important Question pdf