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The following question based on Introduction to Indian Economy topic of indian economy mcq
(a) only aggregate demand is increased
(b) all the expenditure is denoted national debt payment only
(c) government expenditure leads to increase in the aggregate supply in ratio of aggregate demand
(d) All of the above
The correct answers to the above question in:
Answer: (d)
The definition of deficit financing is likely to vary with the purpose for which such a definition is needed.
In one sense by deficit financing we mean the excess of government expenditure over its normal receipts raised by taxes, fees, and other sources. In this definition such expenditure whether obtained through borrowing or from the banking system measures the budget deficit. Deficit financing is said to have been used whenever government expenditure exceeds its receipts. In under-developed countries deficit financing may be in two forms:
- Difference between overall revenue receipts and expenditure
- Deficit financing may be equal to borrowing from the banking system of the country.
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Read more introduction Based Indian Economy Questions and Answers
Question : 1
Economically, one of the results of the British rule in India in the 19th century was the
a) growth in the number of Indian owned factories
b) commercialisation of Indian agriculture
c) increase in the export of Indian handicrafts
d) rapid increase in the urban population
Answer »Answer: (b)
Question : 2
One rupee notes are issued by the
a) State Bank of India
b) Reserve Bank of India
c) President of India
d) Government of India
Answer »Answer: (d)
While the Reserve Bank of India (RBI) has the authority to issue banknotes of denominational values of Rs.2, Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500, Rs.1,000, Rs.5,000 and Rs.10,000, the one rupee note was printed and issued by the central government.
The Government of India also has the sole right to mint coins of all denominations.
Question : 3
The main source of revenue for a State Government in India is
a) Excise duty
b) Sales tax
c) Income tax
d) Property tax
Answer »Answer: (b)
The principal source of State own tax revenues is a sales tax which accounts for about 60 per cent of the total.
The other major components of States own tax revenues according to their revenue share are State excise, registration and stamp duty, motor vehicle and passenger tax, electricity duty, land revenues, professional tax, entertainment taxes and other sundry taxes.
In the wake of economic reforms, several States competitively announced various tax concessions, especially sales tax concessions, to attract private investments.
These tax wars resulted in a considerable reduction in the buoyancy of growth of tax revenues of the States without commensurate gains in terms of private investment.
Question : 4
Who among the following had propounded the concept of ‘Trusteeship’?
a) Aurobindo Ghosh
b) Mahatma Gandhi
c) M.N. Roy
d) G.K. Gokhale
Answer »Answer: (b)
Question : 5
When development in economy takes place, the share of tertiary sector in national income
a) first rises and then falls
b) remains constant
c) keeps on increasing
d) first falls and then rises
Answer »Answer: (c)
When development in the economy takes place, the share of the tertiary sector in national income keeps on increasing because the tertiary sector is involved in services within and outside the country.
With development the disposable income of individuals income results in the growth of banking, trading, communication etc., both domestically and internationally.
Question : 6
In which plan was self-reliance first emphasised
a) Third Plan
b) Second Plan
c) Fourth Plan
d) Fifth Plan
Answer »Answer: (d)
In the Fifth Five-Year Plan (1974–1979), stress was by laid on employment, poverty alleviation, and justice. The plan also focused on self-reliance in agricultural production and defence.
For achieving economic self-reliance, the Plan aimed at elimination of special forms of external assistance, particularly food and fertilizer imports.
GET Introduction to Indian Economy PRACTICE TEST EXERCISES
introduction to indian economy section 1
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