Question: Why Do Modern Government Spend A Lot Of Money On Different Activities Without Earning Profit?

How is government spending financed?

Government also gets money from sin taxes, loans, donations and investments.

Local government gets most of its income from selling electricity and water and from a special tax on property called `property rates’.

They also get grants from national Treasury for infrastructure and for the equitable share..

Why do we explain public sector?

Public sector is important for both social and economic development. They provide the basic facilities like water, electricity which private sector will not provide or will provide with high rates. They give educational and health institutions to the socially and educationally backward people to make them come forward.

Is it necessary for us to have the public sector if yes no give reason?

Yes, it is necessary to have public sector due to its contribution to economic development of India. (i) It ensures rapid economic development. (ii) It promotes redistribution of Income and wealth. (iii) It develops industries which require huge investment.

What are the two sectors of economy on the basis of nature of work?

WE can classify the economic sector on the basis of nature of activities in three sectors, namely, Primary, Secondaiy and Tertiary sector. The product we get from the nature belongs to primary sector as agriculture.

Does government spending affect GDP?

As you know, if any element of the C + I + G + (Ex – Im) formula increases, then GDP—total demand—increases. If the “G” portion—government spending at all levels—increases, then GDP increases. Similarly, if government spending decreases, then GDP decreases.

What is the importance of employment Class 10?

employment is an important part of the economic, social and environmental development process and procedure of any country. Employment provides financial freedom and decision making power. Employment opportunities for citizens in India can help to reduce corruption, remove terrorism.

What are the activities where government spend large sum of money and why?

Explanation: The major part of the government money is spent on supply of goods and services for the welfare of the people, defense forces, providing good network of roads and railways for the people to travel, education facilities and providing for health facilities.

What are the two sectors of economy on the basis of nature of work employment )? Which one is better and why?

Answer: On the basis of employment conditions, activities in the economy are classified as organised and unorganised. The organised sector offers job security and employment benefits, while the unorganised sector is marked by low wages and lack of job security.

Which activities are supported by government?

Answer. Answer: Education, Roads,Schools,Trade,Transport,Liquor shops,Small scale manufacturing,Fishing,Agriculture, Explanation: Government hold public sectors that owns assets and produce services.

How does public sector help in the development of a country?

1. It provides basic health and educational services in the country by establishing hospitals and schools for the poor and the needy. 2. It provides water, postal services, electricity, irrigation etc.

What activities does the government support?

Education, Roads,Schools,Trade,Transport,Liquor shops,Small scale manufacturing,Fishing,Agriculture, Explanation: Government hold public sectors that owns assets and produce services.

What are the 5 major sources of revenue for the government?


Can you say which sector has grown the most over forty years?

Tertiary sector has grown most over the last 40 years.

Why does the government spend money?

Government spends money for a variety of reasons, including: To supply goods and services that the private sector would fail to do, such as public goods, including defence, roads and bridges; merit goods, such as hospitals and schools; and welfare payments and benefits, including unemployment and disability benefit.

Why it is important for public activities to focus on certain areas?

Answer. Answer: When it comes to budgeting, identifying areas of weakness helps the government to allocate resources in a useful and sustainable manner. … In countries with deep cultural, religious and economic diversity such as India, it is extremely important for the government to allocate resources wisely..

What the government spends tax money on?

The federal taxes you pay are used by the government to invest in technology and education, and to provide goods and services for the benefit of the American people. The three biggest categories of expenditures are: Major health programs, such as Medicare and Medicaid. Social security.

What is it called when the federal government spends more money than it collects?

When the federal government spends more money than it receives in taxes in a given year, it runs a budget deficit. … If government spending and taxes are equal, it is said to have a balanced budget.

Why do modern day governments spend on a whole range of activities?

Need large sum of expenditure that cannot be borne by the private sector. So, the government takes up such activities in the interest of the people in a democracy. Thus, the government takes up various activities and spends a lot of expenditure on them.

Where does the government spend the most money?

Nearly 60 percent of mandatory spending in 2019 was for Social Security and other income support programs (figure 3). Most of the remainder paid for the two major government health programs, Medicare and Medicaid.

Why do we need the government to spend on certain activities?

(i) These activities require^huge amount of money which is beyond the capacity of private sector. (ii) Private sector may charge high rate for their use. … (iv) Sometimes government in order to support the private sector has to take up the activities like selling electricity at generation cost.

What are the 3 types of government spending?

Federal government spending in the United States can be broken down into three general categories: mandatory/entitlement spending, discretionary spending, and interest on government debt.