Question

Which of the following is a key component of a state's revenue expenditure?

• A. Interest payments on loans
• B. Purchase of military equipment
• C. Grants to local governments
• D. Salaries and pensions of government employees

Answer 1

Answer:

D. Salaries and pensions of government employees

• Revenue expenditure covers recurring expenses for the day-to-day functioning of the government, which do not create assets.

• Salaries and pensions are prime examples.