Question

If the Government establishes a new hospital, this expenditure incurred in the Government Budget will be a type of ______ expenditure.

Options

• Revenue expenditure

• Capital expenditure

• None-development expenditure

• None of these

Answer 1

If the Government establishes a new hospital, this expenditure incurred in the Government Budget will be a type of capital expenditure.

Explanation:

When the government establishes a new hospital, it is investing in creating a long-term asset. Such spending is classified as capital expenditure because it leads to the creation of infrastructure that will provide services over a long period.