Government Budget and the Economy — Practice Quiz

Non-rivalrous consumption, Non-excludable benefits, Creates free-rider problem, Benefits available to all citizens

Public goods have two main characteristics: non-rivalrous (one person's consumption doesn't reduce availability for others) and non-excludable (difficult to prevent anyone from using them). This creates free-rider problems and makes benefits available to all, which is why government provision is necessary.

Allocation function, Redistribution function, Stabilisation function

The three main functions of government budget are: Allocation (providing public goods), Redistribution (ensuring fair distribution of income), and Stabilisation (controlling economic fluctuations). Privatisation and speculation are not primary budget functions.

July 1, 2017

GST (Goods and Services Tax) was implemented in India from July 1, 2017, during a special midnight session of Parliament. It replaced multiple indirect taxes with a single comprehensive tax system.

Personal Income Tax, Corporation Tax, Wealth Tax

Direct taxes are paid directly by the person or entity on whom they are imposed. Personal Income Tax, Corporation Tax, and Wealth Tax are direct taxes. Excise Tax and Customs Duty are indirect taxes as they can be passed on to consumers.