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

Q-1)   Kelkar Committee, in its second report, has recommended to reduce corporate tax to

(a)

(b)

(c)

(d)


Q-2)   When was the Wealth tax first introduced in India?

(a)

(b)

(c)

(d)


Q-3)   Who had suggested an imposition of ‘expenditure tax’ in India for the first time?

(a)

(b)

(c)

(d)


Q-4)   Consider the following statements. In India, Stamp duties on financial transactions are
  1. Levied and collected by the state
  2. Appropriated by the Union Government
Which of these statement(s) is/are correct?

(a)

(b)

(c)

(d)


Q-5)   Service Tax in India was introduced in the year

(a)

(b)

(c)

(d)


Q-6)   Which of the following best explains the cascading effect of taxation?
  1. When tax imposition leads to a disproportionate increase in prices by an extent more than the rise in the tax.
  2. When tax imposition leads to a disproportionate decrease in prices by an extent more than the rise in the tax.
  3. When tax imposition leads to a disproportionate decrease in imports.
  4. When tax imposition leads to a disproportionate decrease in exports.

(a)

(b)

(c)

(d)

Explanation:

“Taxation over taxes” or “cascading-effect” of the taxes adds to the deadweight loss i.e. slump in total surplus of a supply chain consisting of the supplier, manufacturer, retailer and consumer.

Due to cascading tax imposition leads to a disproportionate increase in prices by an extent more than the rise in the tax.


Q-7)   Which among the following are the sources of revenue for the central Government?
  1. Corporate Tax
  2. Profit from Public Enterprises
  3. Sale of National Savings Certificates
  4. Loans received from the World Bank
  5. Excise duties
Select the correct answer from the codes given below.

(a)

(b)

(c)

(d)


Q-8)   Which of the following taxes fall under the state list of Indian Constitution?
  1. Entertainment tax
  2. Luxury tax
  3. Stamp Duty
  4. Custom Duty
Select the answer using the codes given below

(a)

(b)

(c)

(d)

Explanation:

Customs duties-Export duty and import duty are levied by Central Government.


Q-9)   Which one of the following is not a tax/duty levied by the Government of India?

(a)

(b)

(c)

(d)

Explanation:

Toll Taxes is one the main Sources of revenue for State Governments. It is not levied by Govt. of India.


Q-10)   Which of the following are part of capital budget of Govt. of India?
  1. Issuance of Sovereign Gold Bonds
  2. Receipt from Gold Monetization
Select the correct answer using the code given below:

(a)

(b)

(c)

(d)

Explanation:

In the case of Sovereign Gold Bonds, the government issues/creates the gold bond and in return, it gets money from the public.

This money will come under capital receipt because the gold bond is a kind of liability for the govt. which the govt. must pay in future. Principal payment will come under capital expenditure and interest payment will come under revenue expenditure.

The physical gold which the govt. receives from the pubic in case of gold monetization scheme becomes a liability for the govt. (in return for the physical gold, govt issues a paper which is basically liability for the govt.) which the govt. will have to pay in future either in physical gold form or in cash.