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JAMB Economics 2003 Question 31

Question 31

Public Finance

The distinction between capital and recurrent expenditure lies in the

  1. A.nature of the goods and services to be provided
  2. B.time frame of the expenditure
  3. C.source of the revenue generated
  4. D.amount of expenditure involved
Show the answer and explanation

Answer: B (time frame of the expenditure)

Explanation

Recurrent spending (salaries, running costs) recurs every year, while capital spending creates long-lasting assets; the difference is the time span the spending covers.