Discussion
Expenditure on acquisition of assets like land, building and machinery would come under ambit of :
Answer: C
It comes under capital expenditure.
Capital expenditure is spending that creates assets or reduces liabilities: buying land, constructing buildings, acquiring machinery and equipment. In defence budgets, the purchase of aircraft, ships and weapon systems and the building of military works are booked as capital expenditure.
Revenue expenditure covers recurring costs such as pay, pensions, stores and maintenance, which create no asset. A capital receipt is money coming in, such as loans or disinvestment, not money spent. Aggregate demand is a macroeconomic total, not a budget head.
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