public finance fiscal & monetary policy section 1 MCQ Questions & Answers Detailed Explanation

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The following question based on Fiscal Policy, Public Finance and Monetary Policy topic of indian economy mcq

Questions : Match columns A and B wherein Column B defines Column A
Column A Column B
I. Public Account a. Consists of all revenues and loans received by the government
II. Consolidated fund b. Comprises of the sum placed at the disposal of the President to meet unforeseen expenditure
III. Contingency fund c. Consists of receipts and payments, which are in form of deposit account with the government, such as provident funds, small savings, etc
Codes: I II III

(a) I-c, II-a, III-b

(b) I-a, II-d, III-b

(c) I-a, II-b, III-c

(d) I-b, II-a, III-c

The correct answers to the above question in:

Answer: (a)

The budget shows the receipts and payments of the government under three heads.

All revenues and loans received by the government comes under Consolidated fund, the sum placed at the disposal of the President to meet unforeseen expenditure falls under Contingency fund and receipts & payments which are in form of deposit account with the government comprises Public Account

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Read more public finance fiscal and monetary policy Based Indian Economy Questions and Answers

Question : 1

Fiscal Policy in India is formulated by

a) the Finance Ministry

b) the Planning Commission

c) the Reserve Bank of India

d) the Securities and Exchange Board of India

Answer: (a)

The Department of Economic Affairs (DEA) under Ministry of Finance is the nodal agency of the Union Government to formulate and monitor country’s economic policies and programmes having a bearing on domestic and international aspects of economic management.

Question : 2

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) 3 and 4

b) 1, 2 and 3

c) 1 and 2

d) 1, 2, 3 and 4

Answer: (b)

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

Question : 3

Which of the following is/are types of Budget?

  1. Capital budget
  2. Revenue budget

a) 1 only

b) 2 only

c) 1 and 2

d) Neither 1 nor 2

Answer: (a)

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.

Question : 4

Basic infrastructure facilities in Economics are known as :

a) Working capital

b) Physical capital

c) Human capital

d) Social overheads capital

Answer: (d)

Social overheads capital is the capital spent on social infrastructures, such as schools, universities, hospitals, libraries.

They are capital goods of types that are available to anybody, hence social; and are not tightly linked to any particular part of the production, hence overhead.

Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.

Question : 5

Fiscal Policy in India is formulated by

a) the Reserve Bank of India

b) the Securities and Exchange Board of India

c) the Planning Commission

d) the Finance Ministry

Answer: (d)

The Department of Economic Affairs (DEA) under Ministry of Finance is the nodal agency of the Union Government to formulate and monitor country’s economic policies and programmes having a bearing on domestic and international aspects of economic management.

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