Which of the following is a component of revenue expenditure of the government?
A. Loans to state governments
B. Expenditure on construction of roads
C. Expenditure on acquisition of land
D. Interest payments
Answer: Option D
Solution (By JKSSB Mock Tests)
Revenue expenditure does not create assets or reduce liabilities. Interest payments are a major component of revenue expenditure. Acquisition of land, loans and construction create assets and are capital expenditure.
Explanation:
The accelerator principle posits that net investment is a function of the change in output or income; a rise in demand induces a multiple increase in investment.
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