NCERT Solutions Class 12 Economics Government Budget and the Economy

NCERT Solutions Class 12 Economics Government Budget and the Economy. NCERT book for Economics in class 12 is strongly recommened by teachers and the CBSE and NCERT boards. Please download the NCERT solutions for class 12 Economics free in PDF made by teachers of the best schools in India. These solutions are carefully compiled to give detailed understanding of the concepts and also steps of solutions. The NCERT solutions are free to download in pdf format. Please refer to the download link below to download the pdf file and also refer to other chapters and subjects to get the solutions to Economics NCERT book questions and exercises

Government Budget and the Economy

Question 1. Explain why public goods must be provided by the government? [3-4 Marks]

Answer: 1. Public goods are those goods and services for which consumption by some individuals does not reduce the amount available to others.

2. For example parks, roads, water, bridges, national defence etc..

3. These goods are non-rival and non-excludable ones.

4. People receives benefits from public goods but do not pay for them. Such a goods can only prepared by government.

Question 2. Distinguish between revenue expenditure and capital expenditure . State the basis of classifying government expenditure into revenue and capital expenditure. Give an example of each.



Question 3. The fiscal deficit gives the borrowing requirement of the government Elucidate. [3-4 Marks]

Answer:1. Fiscal deficit is defined as excess of total expenditure over total receipts (revenue and capital receipts) excluding borrowing. In the form of an equation:

Fiscal Deficit = Total Budget Expenditure – Total Budget Receipts (Net of borrowing) = Total Expenditure (Revenue

Expenditure + Capital Expenditure) – Revenue Receipts (Tax Revenue + Non-Tax Revenue) – Non-Debt Capital Receipts (Recovery of Loans + Dis-investment Proceeds)

= Revenue Deficit + Capital Deficit (excluding Borrowing)- Borrowing

= Net borrowing at home + Borrowing from RBI + Borrowing from abroad

2. Fiscal deficit shows total borrowing requirements of the government from all sources.

3. As the government borrowing increases, its liability in future to repay loan with interest also increases leading to a higher revenue deficit. Therefore, fiscal deficit should be as low as possible.

Please click on link below to download NCERT Solutions Class 12 Economics Government Budget and the Economy.



Click to View or Download pdf file
Click for more Economics Study Material

Latest NCERT & CBSE News

Read the latest news and announcements from NCERT and CBSE below. Important updates relating to your studies which will help you to keep yourself updated with latest happenings in school level education. Keep yourself updated with all latest news and also read articles from teachers which will help you to improve your studies, increase motivation level and promote faster learning

Board Exams Class 10 and Class 12 Datesheet 2020

CBSE has announced the datesheet for the remaining exams of class 10 and class 12 exams. The exams are going to start in July. The class 10 and 12th board exams will be conducted for the remaining 29 papers from July 1 to July 15, 2020, at various centers nominated by...

Board Cancelled Official CBSE Statement

Keeping in view the requests received from various State Governments and the changed circumstances as on date, following has been decided- 1. Examinations for classes X and XII which were scheduled from 1st July to 15th, 2020 stand cancelled. 2. Assessment of the...

TV Channels for Students by CBSE

In enhancing the students studying part, the Government is planning to introduce one standard one channel plan. The lockdown in India has adversely collapsed all the operations including schools, colleges, and workplaces with unanticipated setbacks. On behalf of the...

Board Exams helpline by CBSE

According to the recent announcement of CBSE, the pending Class 10 and 12 Board exams are going to be held from 01 July to 15 July 2020 in India. Along with this, it has also been decided to resume the free of cost tele-counseling service for students from 9.30 am to 5...

CBSE Boards Answer Sheet Evaluation Class 10 and Class 12

HRD Minister Ramesh Pokhriyal, through a video conference with all the education ministers of the state, discussed the further steps to be taken to smoothen the education process during the Covid-19 lockdown. The most important topic which was discussed repeatedly on...

Art Integrated Project work for classes 1 to 10

CBSE Board has decided to introduce Art-Integrated Project work for classes I to X to promote Art-Integrated Learning in schools to make teaching learning Competency-Based and joyful. As part of this, at least one Art-Integrated Project in each subject shall be taken...

Studies Today