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

Answer: (b)

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

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.

Answer: (b)

The tax to GDP ratio (centre and states together) was 6 percent in 1950-51, rose to 11.89 in 2007-08 and is currently around 10.60%

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

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.

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.