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Expenditures incurred for purposes other than the creation of physical or financial assets of the central government are classified as which of the following?

Solution

✅ Correct Option: 4

Revenue expenditure is expenditure that neither creates assets nor reduces liabilities of the government, such as salaries, subsidies, and interest payments. Capital expenditure, by contrast, creates physical or financial assets or reduces liabilities. Hence the answer is revenue expenditure.

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