Expenditure made by the government for the creation of physical or financial assets is known as _______.

The correct answer is Capital Expenditure.

Key Points

• Capital Expenditure is the expenditure that is made by the government to create physical or financial assets.
• This may include the construction of roads, bridges, buildings, equipment, etc.
• The purpose of capital expenditure is to create long-term assets that will lead to economic growth in the future.
• This expenditure plays an important role in the government budget and is necessary to strengthen the economic structure.

Additional Information

• Revenue Expenditure
  • This is the expenditure incurred by the government for general administrative functions and services.
  • It includes salaries, pensions, subsidies, and other administrative expenses.
  • Revenue expenditure is intended to provide immediate services and not to create long-term assets.
• Defence Expenditure
  • This expenditure is made for the maintenance and advancement of the military and defense services.
  • It includes the salaries of soldiers, purchase of weapons, and expenses for military operations.
• Subsidy Expenditure
  • This expenditure is made by the government to provide subsidies in various sectors, such as agriculture, food security, and fuel.
  • Its purpose is to provide financial support to the poor and low-income groups.
• Financial Assets
  • These are assets that are held by the government as investments, such as government bonds, stocks, etc.
  • The purpose of financial assets is to provide financial stability and generate income from investments.