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Identify, which of… (Class 12 Economics SQP 2026-27, Q1)

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EconomicsCBSE Class 12 · Sample paper, session 2026-27 · 1 mark · MCQ

CBSE Class 12 Economics sample paper 2026-27: question 1

From the official CBSE sample question paper for 2026-27, section A, question 1, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q1 · 1 mark · MCQGovernment Budget and the Economy

Identify, which of the following expenditure falls under the category of capital expenditure. (Choose the correct option)
(i) Payment of salaries to central government employees.
(ii) Construction of new national highways under Bharatmala Pariyojana.
(iii) Interest payment by the government on past loans from World Bank.
(iv) Expenditure on installation of the Kavach automatic train protection system.

  1. (A)(i) and (ii)
  2. (B)(ii) and (iv)
  3. (C)(ii) and (iii)
  4. (D)(i) and (iv)

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2026-27.

Hints

Open one hint at a time and try again before the next.

Hint 1

Does the spending create an asset for the government?

Hint 2

Interest and salaries recur every year without creating assets.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Capital expenditure creates physical or financial assets for the government (or reduces its liabilities). Salaries (i) and interest payments (iii) create no asset, so they are revenue expenditure.

  2. Building national highways under Bharatmala (ii) and installing the Kavach train protection system (iv) create durable assets, so they are capital expenditure. Option (B).

    1 mark

Answer: (B) (ii) and (iv)

Where the marks are

  • Asset-creating spending is capital expenditure (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Government Budget and the Economy, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2026-27: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.