Choose the correct statement related to government expenditure.

Correct option is D

• Capital expenditure refers to spending by the government on creating long-term assets such as infrastructure (roads, bridges, schools, etc.).

  This kind of expenditure contributes to the overall GDP growth because it creates assets that generate future economic returns, enhance productivity, and improve the country's infrastructure, which directly impacts the economy.

• Revenue expenditure, on the other hand, includes government spending on day-to-day operational costs such as wages, subsidies, and interest payments. While necessary for maintaining operations, it does not directly contribute to GDP growth since it does not create long-term assets or future productivity.

Information Booster:

• Capital expenditure is often associated with investment in infrastructure and development projects, which can stimulate economic activity and contribute to GDP growth.
• Revenue expenditure, while important for government operations, typically doesn't have the same direct effect on the economy's productive capacity as capital expenditure.