Interest payment on government debt is classified as: MCQ with Answer and Explanation

Interest payment on government debt is classified as:
A. non-tax revenue
B. plan expenditure
C. capital expenditure
D. revenue expenditure
Answer: Option D
Solution (By JKSSB Mock Tests)
Interest payment on debt is a recurring revenue expenditure.

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Practice More Economy Set 1 Questions

Question #1
The 'four-sector economy' circular flow includes:
A. households, firms, banks and foreign sector
B. households, firms, government and foreign sector
C. households, firms, government and banks only
D. households, government, banks and firms

Correct Answer: Option B


Explanation:
A four-sector economy includes households, firms, government and the external sector.

This question belongs to: Economy GK Economy Set 1
Question #2
In the context of global economic governance, the 'Bridgetown Initiative' is associated with:
A. Proposals to reform the international financial architecture to better address climate vulnerability and development needs of small and vulnerable states
B. Only bilateral aid without systemic reform
C. Only monetary-policy coordination among advanced economies
D. Only trade liberalisation

Correct Answer: Option A


Explanation:
The Bridgetown Initiative, championed by Barbados, calls for major reforms of the global financial system—including debt relief, new liquidity instruments and scaled-up climate finance—to meet the needs of climate-vulnerable developing countries.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'liquidity adjustment facility' was introduced in India based on the recommendations of:
A. Urjit Patel Committee
B. Rangarajan Committee
C. Kelkar Committee
D. Narasimham Committee

Correct Answer: Option D


Explanation:
The Liquidity Adjustment Facility was introduced in 2000 based on Narasimham Committee recommendations.

This question belongs to: Economy GK Economy Set 1