Practice Quiz set 1 - indian economy mcq Online Quiz (set-1) For All Competitive Exams

Q-1)   Fiscal responsibility and Budget Management Act was enacted in India in the year

(a)

(b)

(c)

(d)

Q-2)   In which year was Service tax introduced?
  1. 1983-84
  2. 1994-95
  3. 1967-68
  4. 2003-2004

(a)

(b)

(c)

(d)

Explanation:

Service tax was introduced in 1994-95 to address the asymmetric and distortionary treatment of goods and services in tax framework and to widen the tax net

Q-3)   Which of the following statements is/are correct in regards to Revenue budget?
  1. It consists of all capital receipts and expenditure such as domestic and foreign loans, loan repayment, foreign and etc
  2. It consists of all current receipts, such as taxation, dividends of public sector units (PSU’s) and expenditure of the government

(a)

(b)

(c)

(d)

Explanation:

Revenue budget contains information about taxation such as central excise, custom duty, corporation tax etc

Q-4)   Which among the following is/are the nodal agency for implementing the monetary policy?
  1. State Bank of India
  2. Reserve Bank of India
  3. Union Bank

(a)

(b)

(c)

(d)

Explanation:

The Reserve Bank of India is the nodal agency for implementing the monetary policy. RBI has defined its monetary policy in terms of “adequate financing of economic growth and at the same time ensuring reasonable price stability”.

Q-5)   Which among the following is / are indirect taxes levied by Centre and state?
  1. Excise
  2. Custom
  3. Service tax
  4. Property tax
  5. Income tax
Choose the correct option from the codes given below:

(a)

(b)

(c)

(d)

Explanation:

Excise tax, custom duty and service tax are all indirect taxes while property tax and income tax are direct taxes.

Q-6)   Consider the following statements Full convertibility of the rupee may mean
  1. Its free float with the international currencies.
  2. Its direct exchange with any other international currency at any prescribed place inside and outside the country. 3. It acts just like any other international currency.
Which of these statements are correct?

(a)

(b)

(c)

(d)

Q-7)   Which of the following is/are types of Budget?
  1. Capital budget
  2. Revenue budget

(a)

(b)

(c)

(d)

Explanation:

There are two types of budgets

i.e., Revenue budget and Capital budget. The revenue budget contains all current receipts, such as taxation, (central excise, customs duty, corporation tax) dividends of public sector units (PSU’s) and expenditure of the government.

The capital budget consists of all capital receipts and expenditures such as domestic and foreign loans, loan repayment, foreign and etc.

Q-8)   Which of the following statements is/are correct with reference to Primary deficit?
  1. India started using this term since 1997-98
  2. Primary deficit is fiscal deficit minus interest payments
  3. It shows the current state of government finances

(a)

(b)

(c)

(d)

Explanation:

Primary deficit is fiscal deficit minus interest payments. India started using this term in 1997- 98.

Primary deficit is considered a very useful tool in helping bring more transparency in the government’s pattern of expenditure. It shows the current state of government finances.

If interest payments are deducted from a fiscal deficit, then it will obviously show a lesser deficit for that year as the interest payments are on account of loans taken in the past and not in the present year

Q-9)   Which among the following statements is incorrect in regards to the Statutory liquid ratio?
  1. Statutory liquid ratio refers to the amount that the commercial banks require to maintain in the form of cash, or gold or govt. approved securities before providing credit to the customers
  2. Statutory liquid ratio is determined and maintained by RBI in order to control the expansion of bank credit
  3. At present, the SLR is 4%
  4. It is determined as percentage total demand and percentage of time liabilities

(a)

(b)

(c)

(d)

Explanation:

At present, the SLR is 18.00%

Q-10)   Which of the following is /are among the noticeable features of the recommendations of the Thirteenth Finance Commission?
  1. A design for the Goods and Services Tax, and a compensation package linked to adherence to the proposed design.
  2. A design for the creation of lakhs of jobs in the next ten years in consonance with India’s demographic dividend.
  3. Devolution of a specified share of central taxes to local bodies as grants.
Select the correct answer using the codes given below

(a)

(b)

(c)

(d)

Explanation:

A design for the Goods and Services Tax, and a compensation package linked to adherence to the proposed design