Borrowings and recovery of loans
Categorize the borrowings and recovery of loans into capital and revenue receipts of government budget. Give reason too.
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Answer: Borrowings are capital receipts since the government is beneath obligation to return the amount all along with interest therefore it creates liability for government. Recovery of loans is as well capital receipts since such decrease assets of the government.
Describe the following terms: (i) Business fixed investment (ii) Inventory Investment (iii) Residential construction Investment (iv) Public Investment.
Definition of surplus: It is a condition in which quantity supplied is more than quantity demanded. To remove the surplus, producers will minimize the price till the market reaches to equilibrium.
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10 US dollars are exchanged for 500 Indian rupees. Calculate the exchange rate for Indian currency? Answer: $1 = 500/10 = Rs.50, that is, $1 = Rs. 50
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