Explain the 'redistribution of income' objective of Government budget.
Redistribution of income is one of the important objectives of government budget. The government through its budgetary policy attempts to promote fair and right distribution of income in an economy. This is done through taxation and expenditure policy. Through its taxation policy, government levies high rate of tax on rich people reducing their disposable income and lowers the rate on lower income group. Purchasing power extracted from the higher income groups in the form of taxes is then transferred to the poor sections of the society through the expenditure policy (subsidies, transfer payments, etc). Thus, with the help of taxation and expenditure policy in the budget, the government aims at redistribution of income such that a fair and just distribution of income is achieved in the society.
Giving reasons classify the following into intermediate products and final products:
Furniture purchased by a school.
Giving reasons classify the following into intermediate products and final products:
Chalks, dusters, etc. purchased by a school.
Explain the role of the following in correcting 'excess demand' in an economy:
Open market operations
Distinguish between collusive and non-collusive oligopoly. Explain how the oligopoly firms are interdependent in taking price and output decisions.
Explain the process of money creation by the commercial banks with the help of a numerical example.
Explain the role of the following in correcting 'deficient demand' in an economy:
Open market operations.
From the following data about a Government budget, find out (a) Revenue deficit, (b) Fiscal deficit and (c) Primary deficit:
(Rs. Arab)
(i) Capital receipts net of borrowings 95
(ii) Revenue expenditure 100
(iii) Interest payments 10
(iv) Revenue receipts 80
(v) Capital expenditure 110
Explain the role of the following in correcting 'deficient demand' in an economy:
Bank rate
