Government expenditure on the construction of roads and bridges is
Answer Details
Government expenditure on the construction of roads and bridges is capital expenditure.
Capital expenditures are expenses made by a company or government to acquire, improve, or maintain physical assets, such as buildings, machinery, or infrastructure. In the case of roads and bridges, the government is investing in the creation of new physical assets that will benefit the public for years to come. These assets are considered to have a long-term value and will contribute to economic growth and development.
In contrast, recurrent expenditures are ongoing expenses, such as salaries, utilities, and maintenance costs, that are necessary to keep an organization running but do not create any new physical assets. Supplementary expenditures are additional expenses made to cover unexpected or emergency situations, while variable expenditures are expenses that vary based on the level of output or activity.
Therefore, since the construction of roads and bridges is a long-term investment in physical assets, it is considered capital expenditure for the government.