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प्रश्न
Union Finance Minister Mrs. Nirmala Sitharaman announced during her Budget speech that the Centre would reduce its fiscal deficit to 5.1% of gross GDP in 2024 – 25. (The present fiscal deficit is 5.8% of GDP.)
(Source: Union budget 2024 – 25)
What would be the impact of this decision on government borrowing? Why?
उत्तर
Decision of reduction of fiscal deficit will lead to a decrease in government borrowing because
Fiscal deficit = Total expenditure of the government − (Revenue receipt + Recoveries of loans + other receipts of the government) = Borrowing and other liabilities of the government.
Therefore, a reduction in the fiscal deficit will lead to a reduction in borrowing.
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संबंधित प्रश्न
Giving reason explain how should the following be treated in estimating gross domestic product at market price?
Fees to a mechanic paid by a firm.
How will you treat the following while estimating domestic product of a country? Give reasons for your answer:
Gifts are given by an employer to his employees on Independence Day
Calculate (a) national income (b) net national income disposable income:
| (Rs. in crores) | ||
| 1 | Net factor income to abroad | (-) 50 |
| 2 | Net indirect taxes | 800 |
| 3 | Net current transfers from rest of the word | 100 |
| 4 | Net imports | 200 |
| 5 | Private final consumption expenditure | 5000 |
| 6 | Government final consumption expenditure | 3000 |
| 7 | Gross domestic capital formation | 1000 |
| 8 | Consumption of fixed capital | 150 |
| 9 | Change in stock | (-) 50 |
| 10 | Mixed income | 4000 |
| 11 | Scholarship to students | 80 |
Explain how ‘distribution of gross domestic product’ is a limitation in taking gross domestic product as an index of welfare.
Write down the three identities of calculating the GDP of a country by the three methods. Also briefly explain why each of these should give us the same value of GDP.
Read the following statements - Assertion (A) and Reason (R):
Assertion (A) - Acquisition of a domestic (Indian) company by a foreign (Australian) company will be recorded on the credit side of the Balance of Payment Account.
Reason(R) - It leads to the outflow of foreign exchange from the domestic economy.
From the given alternatives choose the correct one:
Which of the following statements are correct
Statement 1: The wealth of a country can be increased with the efforts of a healthy workforce.
Statement 2: Investment in the health sector increases the efficiency and productivity of a nation's workforce.
Statement 3: In contrast to an unhealthy person, a healthy person can work better with more efficiency and consequently, can contribute relatively more to the GDP of the country
Which of the following are the limitations of using GDP as an index of the welfare of a country?
______ is Domestic Income.
______ is the difference between Domestic Income and National Income.
______ is the output at base-year prices.
What does Real GDP show?
GDP is not an appropriate indicator of welfare because of:
Identify the correct pair of items from the following Columns I and II:
| Column I | Column II |
| (1) Opportunity Cost | (a) ) The value of a factor in its next worst alternative use. |
| (2) Explicit Cost | (b) ) The expenses incurred by the producer when the inputs are purchased or hired from the market. |
| (3) Implicit Cost | (c) The value of a factor in its next best alternative use. |
| (4) Hidden Cost | (d) The expenses incurred by the producer when the inputs are purchased or hired from the black market. |
Read the below case and answer the questions that follow:
The Centre on Saturday increased the budgetary allocation for the environment ministry from last fiscal by nearly five percent for 2020-21 with no change in the amount allotted to pollution abatement and climate change action plan. Union Finance Minister, Nirmala Sitharaman, allocated ₹3,100 crores for the ministry out of which ₹460 crores were allotted to control pollution, which is the same as the money it received in the last budget. Control of pollution has been conceptualized to provide financial assistance to Pollution Control Boards/Committees and funding to National Clean Air Programme (NCAP). Similarly, the budget for pollution abatement, which was cut by 50 percent last year from 2018-to 19, remained unchanged at ₹10 crores. The minister also announced that states, which are formulating and implementing plans for ensuring cleaner air in cities above one million population should be encouraged.
- Budget 2020: Allocation for Environment Ministry up 5% to ₹3,100 crore - Business Standards, 1st February 2020
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Distinguish between Gross Domestic Product at Market Price and Net Domestic Product at Market Price.
From the following data, calculate the value of operating surplus:
| S.No. | Items | Amount in (₹ crore) |
| (i) | Royalty | 5 |
|
(ii) |
Rent | 75 |
| (iii) | Interest | 30 |
| (iv) | Net domestic product at factor cost |
400 |
| (v) | Profit | 45 |
| (vi) | Dividends | 20 |
Read the following statements carefully:
Statement 1: Gross Domestic Product (GDP) is the sum total of the gross market value of all the final goods and services added by all the sectors in the economy during a fiscal year.
Statement 2: Gross Value Added at Market Price (GVAMP) is equal to the excess of value of output over intermediate consumption.
In the light of the given statements, choose the correct alternative from the following.
State whether the following items will be included in the estimation of National Income or not? Give a reason for your answer.
Wooden cupboard purchased by a family.
