Q15 of 24 Page 1

Define the capital receipts of a government.

Capital receipts are those receipts that either increases the liability or reduces the asset holding of the government. These receipts mainly include those receipts which are received in long term. The main items of capital receipt are borrowing by the government from different sources, grants received from foreign countries etc. It comes under the liabilities side of the government balance sheet.


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Define money supply

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State one fiscal measure that can be used to reduce the gap between rich and poor.

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From the following data calculate Fiscal Deficit:

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Estimate the value of ex-ante AD, when autonomous investment and consumption expenditure (A) is 50 crores, and MPS is 0.2 and level of income is 300 crores.

OR


Calculate Multiplier when MPC is 4/5 and 1/2. From the calculations establish the relation between the size of Multiplier and size of MPC.