NCERT Solutions class 12 Economics The Government Budget and Economy

NCERT Solutions class 12 Economics The Government Budget and Economy Class 12 Economics book solutions are available in PDF format for free download. These ncert book chapter wise questions and answers are very helpful for CBSE board exam. CBSE recommends NCERT books and most of the questions in CBSE exam are asked from NCERT text books. Class 12 Economics chapter wise NCERT solution for Economics part 1 and Economics part 2 for all the chapters can be downloaded from our website and myCBSEguide mobile app for free.

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Microeconomics

• Introduction
• Theory o Consumer Behavior
• Production and Costs
• Theory of Firm Under Perfect Competition
• Market Competition
• Non Competitive Markets

Macroeconomics

• Introduction
• National Income Accounting
• Money and Banking
• Income Determination
• Government Budget and Economy
• Open Economy Macroeconomics

CHAPTER Five Government Budget and Economy

1. Components of the Government Budget
   1. The Revenue Account
   2. The Capital Account
   3. Measures of Government Deficit
2. Fiscal Policy
   1. Changes in Government Expenditure
   2. Changes in Taxes
   3. Debt

NCERT Solutions class 12 Economics The Government Budget and Economy

1. Explain why public goods must be provided by the government.

2. Distinguish between revenue expenditure and capital expenditure.

3. ‘The fiscal deficit gives the borrowing requirement of the government’. Elucidate.

4. Give the relationship between the revenue deficit and the fiscal deficit.

5. Suppose that for a particular economy, investment is equal to 200, government purchases are 150, net taxes (that is lump-sum taxes minus transfers) is 100 and consumption is given by C = 100 + 0.75Y (a) What is the level of equilibrium income? (b) Calculate the value of the government expenditure multiplier and the tax multiplier. (c) If government expenditure increases by 200, find the change in equilibrium income.

6. Consider an economy described by the following functions: C = 20 + 0.80Y, I = 30, G = 50, TR = 100 (a) Find the equilibrium level of income and the autonomous expenditure multiplier in the model. (b) If government expenditure increases by 30, what is the impact on equilibrium income? (c) If a lump-sum tax of 30 is added to pay for the increase in government purchases, how will equilibrium income change?

7. In the above question, calculate the effect on output of a 10 per cent increase in transfers, and a 10 per cent increase in lump-sum taxes. Compare the effects of the two.

8. We suppose that C = 70 + 0.70Y D, I = 90, G = 100, T = 0.10Y

(a) Find the equilibrium income.

(b) What are tax revenues at equilibrium Income? Does the government have a balanced budget?

9. Suppose marginal propensity to consume is 0.75 and there is a 20 per cent proportional income tax. Find the change in equilibrium income for the following (a) Government purchases increase by 20 (b) Transfers decrease by 20.

10. Explain why the tax multiplier is smaller in absolute value than the government expenditure multiplier.

11. Explain the relation between government deficit and government debt.

12. Does public debt impose a burden? Explain.

13. Are fiscal deficits inflationary?

14. Discuss the issue of deficit reduction.

NCERT Solutions for Class 12 Economics

NCERT Solutions class 12 Economics Macro Introduction PDF (Download) Free from myCBSEguide app and myCBSEguide website. Ncert solution class 12 Economics includes text book solutions from both part 1 and part 2. NCERT Solutions for CBSE Class 12 Economics have total 12 chapters. 12 Economics NCERT Solutions in PDF for free Download on our website. Ncert Economics class 12 solutions PDF and Economics ncert class 12 PDF solutions with latest modifications and as per the latest CBSE syllabus are only available in myCBSEguide

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