Question

______ is an example of capital expenditure.

Options

• Repayment of borrowing

• Interest on national debt

• Salaries paid to government staff

• Pension paid to government employees

Answer 1

Repayment of borrowing is an example of capital expenditure.

Explanation:

Repayment of borrowing is classified as capital expenditure because it reduces the government’s liabilities. Capital expenditure involves long-term investments or repayment of debts, whereas items like interest payments, salaries, and pensions are considered revenue expenditure since they are recurring operational expenses.