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Cheat sheet · Class 12 · CBSE · Commerce Economics

Macroeconomics: Government Budget and the Economy cheat sheet

The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.

CBSE Class 12 · Economics

Cheat sheet

Chapter 5Government Budget and the Economy

Fiscal deficit = total expenditure − (revenue receipts + non-debt capital receipts).

1. Receipts

TypeExamples
Revenuetaxes (direct, indirect), non-tax (fees, dividends)
Capitalborrowing, disinvestment, loan recovery

2. Deficits

Revenue deficit=Revenue exp−Revenue receipts\text{Revenue deficit} = \text{Revenue exp} - \text{Revenue receipts}
Fiscal deficit=Total exp−(Revenue receipts+Non-debt capital receipts)\text{Fiscal deficit} = \text{Total exp} - (\text{Revenue receipts} + \text{Non-debt capital receipts})
Primary deficit=Fiscal deficit−Interest payments\text{Primary deficit} = \text{Fiscal deficit} - \text{Interest payments}

3. Objectives

  • Allocation of resources.
  • Redistribution of income.
  • Economic stability.
  • Managing public enterprises.

4. Key Points

  • Fiscal deficit = borrowing requirement.
  • Revenue expenditure creates no assets.
  • FRBM Act targets deficits.
  • Direct tax: income tax; indirect: GST.

Remember: Receipts | 3 deficits | objectives

Macroeconomics: Government Budget and the Economy: questions and notes

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