Practice Quiz set 3 - indian economy mcq Online Quiz (set-1) For All Competitive Exams
Q-1) Value Added Tax was first introduced in India in
(a)
(b)
(c)
(d)
Q-2) Consider the following actions by the government. - Cutting the tax rates
- Increasing the government spending
- Abolishing the subsidies
In the context of economic recession, which of the above actions can be considered a part of the ‘fiscal stimulus’ package?
(a)
(b)
(c)
(d)
Q-3) MODVAT is related to
(a)
(b)
(c)
(d)
MODVAT e.g. modified value added tax is related to Value added tax e.g. VAT.
Q-4) Direct Tax Code in India is related to which of the following?
(a)
(b)
(c)
(d)
Q-5) The "Internal and Extra Budgetary Resources" of Central Public Sector Undertakings (CPSUs) include which of the following:
- Profit of the CPSUs
- Domestic and foreign loans raised by the CPSUs
Select the correct answer using the code given below:
(a)
(b)
(c)
(d)
The investment by Central Public Sector Undertakings (CPSUs) is financed through the following two modes:
- Budgetary support provided by the Central Government
- IEBR was raised by CPSUs on their own.
Internal and Extra Budgetary Resources (IEBR) comprises internal resources and extra-budgetary resources.
Broadly, the internal resources comprise of retained profits – net of dividend to Government and carry forward of reserves and surpluses and extrabudgetary resources are the sum of domestic and foreign loans raised directly by the CPSUs but repaid by the government.
Q-6) Which of the following Tax is levied by Union and collected and appropriated by States?
(a)
(b)
(c)
(d)
As mention in article 268 of Indian Constitution, Stamp Duties are mentioned in the Union List shall be levied by the Government of India but collected and appropriated by the States.
Q-7) Consider the following statements:
- States and UTs combined expenditure is more than Central government expenditure
- States and UTs combined borrowing is more than Central government borrowing
Select the correct answer using the code given below:
(a)
(b)
(c)
(d)
For the year 2019-20, States and UTs (government) combined expenditure was Rs. 37.7 lakh crore and Central government expenditure were around Rs. 27 lakh crores.
So, States and UT combined expenditure is around 1.4 times of Centre and States and UTs combined borrowing for 2019-20 is around Rs. 5.52 lakh crore (2.6% of GDP), while Centres borrowing for 2019-20 is around Rs. 7.7 lakh crore (3.8% of GDP).
Q-8) Consider the following statements regarding Goods and Services Tax?
- It will lead to the harmonization of taxes
- Supplies to exports are zero-rated
Select the correct answer using the code given below:
(a)
(b)
(c)
(d)
GST has led to a reduction in the number of taxes and now the same tax rate is applicable across all the countries on all goods and services. This is called the harmonization of taxes.
On exports, Govt credits back the GST paid to suppliers and hence effectively there is no GST on exports which is also called zero-rated.
Q-9) Which one among the following is not a source of tax revenue for the Central Government in India?
(a)
(b)
(c)
(d)
Motor Vehicle tax is not a source of tax revenue for the Central Government in India. It is type of revenue part of State tax.
Q-10) ‘Fiscal Drag’ expresses the impact of inflation on which of the following ?
(a)
(b)
(c)
(d)
Fiscal drag is an economics term referring to a situation where a government’s net fiscal position (equal to its spending less any taxation) does not meet the net savings goals of the private economy. Fiscal drag is a concept where inflation and earnings growth may push more taxpayers into higher tax bracket.