Economics · Public Expenditure and Keynesian Multiplier
In the framework of the Indian Union Budget, expenditures are categorized to ensure administrative efficiency and constitutional independence. 'Charged Expenditure' represents payments that do not require a parliamentary vote. Parallelly, Keynesian economics provides a mathematical model to estimate how an increase in government expenditure impacts total national income through a specific multiplier effect. Which of the following correctly identifies an item categorized under 'Charged Expenditure' and the standard formula for the government expenditure multiplier (ΔY)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Salaries of Supreme Court judges and ΔY = ΔG × 11 − MPC✓
- 2Expenditure on public works programmes and ΔY = ΔG × (1 − MPC)
- 3Grants-in-aid to State governments and ΔY = ΔG × MPC1 − MPC
- 4Expenditure on Ministry-wise welfare programmes and ΔY = ΔG × 11 + MPC
Correct answer
Salaries of Supreme Court judges and ΔY = ΔG × 11 − MPC
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