In NCERT Class 12 Economics Chapter 5, titled "Government Budget and the Economy," students learn about the fiscal policies implemented by the government to influence the economy. This chapter explores key concepts such as revenue and expenditure, types of budgets, deficit financing, and their impact on economic growth and stability. It also covers various types of deficits, including revenue deficit, fiscal deficit, and primary deficit, and the strategies to manage them.
This article provides an all-in-one resource for exam preparation. It includes sample MCQs and subjective questions for CBSE and CUET, alongside downloadable PDFs of Class 12 Economics Chapter 5 MCQs and previous year questions for detailed practice of NCERT Class 12 Government Budget and the Economy.
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NCERT Class 12 Economics Chapters
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CUET Free Master Classes:
Class 12 Economics Chapter 5 MCQs
This question bank includes previous years' CUET and CBSE MCQs, along with questions curated by subject experts. Below are 5 sample multiple-choice questions (MCQs) for Class 12 Economics Chapter 5: Government Budget and the Economy. For the full set of 50 questions, download the PDF using the link provided below.
1- In order to tackle the problem of rising general price level in an economy, government may come up with a surplus budget to achieve the budget objective of _______.
(i) reallocation of resources
(ii) price stability
(iii) redistribution of income
(a) (i) only
(b) (ii) only
(c) (iii) only
(d) (i) and (iii)
2. Which of the following is not a non-tax revenue receipt?
(a) Goods and Services tax
(b) External grants
(c) Dividends and profits
(d) Disinvestment
3. Which of the following is a capital receipt in the Government Budget?
(a) Income tax
(b) Interest receipt
(c) Sale of shares of a Public Sector Undertaking (PSU)
4. When tax collection _____ the required expenditure, the budget is said to be in ________.
(a) Exceeds, Surplus
(b) Less than, Surplus
(c) Exceeds, deficit
(d) Equal to, Surplus
5. Receipts of the Government that are non-redeemable and cannot be reclaimed from the Government, are under which type of revenues of Government?
(a) Capital Receipts
(b) Tax Revenue
(c) Revenue Receipts
(d) Non-tax Revenue
Class 12 Economics Chapter 5 Subjective Questions Without Solutions
This question bank includes previous years' CBSE subjective questions (2 marks and above) without solutions, along with expert-curated questions. Below are 5 sample subjective questions for Class 12 Economics Chapter 5: Government Budget and the Economy. To access all questions, download the PDF from the link provided below.
- Classify the following statements as revenue receipts or capital receipts. Give valid reasons in support of your answer.
(a) Financial help from a multinational corporation for victims in a flood affected area.
(b) Sale of shares of a Public Sector Undertaking (PSU) to a private company, Y Ltd.
(c) Dividends paid to the Government by the State Bank of India.
(d) Borrowings from International Monetary Fund (IMF).
(CBSE 2019, 3M)
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- Explain the basis of classifying taxes into direct and indirect tax. Give examples.
(CBSE 2017, 3M)
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- Explain any one objective of Government Budget.
(CBSE 2013, 3M)
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- With suitable examples, distinguish between Direct taxes and Indirect taxes.
(CBSE 2023, 4M)
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- Elaborate the objective of allocation of resources‘ in the Government Budget.
(CBSE 2020, 4M)
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Sub Areas of Chapter 5: Government Budget and the Economy
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Chapter Name
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Sub Topics
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Government Budget and the Economy
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5.1 Government Revenue and Expenditure
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5.2 Types of Budgets
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5.3 Deficit Financing
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5.4 Revenue, Fiscal, and Primary Deficits
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5.5 Fiscal Policies and Economic Stability
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Review of NCERT Class 12 Economics Chapter 5
In NCERT Class 12 Economics Chapter 5, "Government Budget and the Economy," students gain an understanding of how the government manages its revenue and expenditure to achieve economic goals. The chapter discusses the importance of fiscal policies, types of deficits, and their implications for economic stability and growth.
Mastering this chapter is crucial for analyzing government strategies in managing the economy and preparing for exams like CBSE, CUET, and other competitive exams.