Question : What is the purpose of a capital budget?
Option 1: To fund ongoing operations of the government
Option 2: To fund major infrastructure projects
Option 3: To fund social welfare programs
Option 4: To fund military operations
Correct Answer: To fund major infrastructure projects
Solution : The correct answer is (b). To fund major infrastructure projects.
The purpose of a capital budget is to allocate funds specifically for major infrastructure projects and investments. A capital budget focuses on long-term investments in physical assets, such as buildings, roads, bridges, airports, schools, and other infrastructure systems. These projects often have a significant impact on the economy and society as a whole.
Capital budgets are separate from operating budgets, which are used to fund the ongoing day-to-day operations of the government, including salaries, utilities, maintenance, and other recurring expenses.
By having a separate capital budget, governments can prioritize and plan for large-scale infrastructure projects that require substantial funding. This allows for careful consideration of the costs, benefits, and feasibility of various projects to ensure that resources are allocated efficiently and effectively.
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