Question

Explain the three classes of government expenditures

Answer 1

Classes of government expenditures:

i) Purchase of goods & services by the government on the services of individual or such as on services - armed forces & on goods - food, medicine, hospital, schools, highways & cars.

ii) Transfer payments which are made by the government for which nothing is recieved in return. Social security benefits, pensions to retired government employees & freedom fighters, benefits to senior citizens.

iii) Expenditure for running various public enterprises such as roads, highways, tolls, airports & hospitals, providing intergovernmental grants.