Government Budget and the Economy-Government Budget (CBSE Class-12 Economics): Questions 11 - 16 of 16

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Question number: 11

» Government Budget and the Economy » Government Budget

Short Answer Question▾

Write in Short

State any one objective of government budget.

Question number: 12

» Government Budget and the Economy » Government Budget

Essay Question▾

Describe in Detail

While calculating national income of India from its domestic factor income, how will you treat the following? Give reasons for your answer.

(i) Salaries received by Indians working in branches of foreign banks in India.

(ii) Profits earned by an Indian Bank from its branches abroad.

(iii) Rent paid by embassy of Japan in India to an Indian resident.

Explanation

(i) Salaries received by Indians working in branches of foreign banks in India is part of net factor income from abroad because these employees are normal residents of India working in foreign establishments. So, this is added to domestic factor income to get national income.

(ii) Profits earned by an… (61 more words) …

Question number: 13

» Government Budget and the Economy » Government Budget

Essay Question▾

Describe in Detail

Explain the circular flow of income.

Explanation

Various sectors like households, firms, government and foreign sectors work. These sectors function with mutual understanding. There is flow of expenditure and income and that of goods and services from these sectors.

Circular flow in a two sector model

Circular Flow in a Two Sector Model

This image of Circular flow in a two sector model

In… (55 more words) …

Question number: 14

» Government Budget and the Economy » Government Budget

Essay Question▾

Describe in Detail

How can a government budget help in reallocation of resource in an economy? Explain.

Explanation

T he government of a country directs the allocation of resources in a manner that there is a balance between the goals of profit maximization and social welfare. Production of goods which are harmful for health are charged heavy taxation and production of socially useful goods are provided with subsidy.

Question number: 15

» Government Budget and the Economy » Government Budget

Essay Question▾

Describe in Detail

How can a government budget help in reducing inequalities of income? Explain.

Explanation

Reducing inequalities of income is one type of objectives of government budget. The government is promoting right distribution of income in an economy. It is taxation policy the government taxes the higher income groups in economy.

Power extracted from the higher income groups through taxes is then transferred to poor… (31 more words) …

Question number: 16

» Government Budget and the Economy » Government Budget

Short Answer Question▾

Write in Short

Define government budget.

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