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

Answer: (b)

1. Fiscal deficit is excess of total expenditure over total receipts less borrowing.
2. Budget deficit is excess of total expenditure over total receipts.
3. Revenue deficit is excess of revenue expenditure over revenue receipts.
4. Primary deficit is excess of total expenditure over total receipts less borrowings and interest payments.

Answer: (d)

Answer: (c)

All taxes which are the personal liability of an assessee come under direct taxes.

They include income tax, professional tax, wealth tax, securities transaction tax, commodity transaction tax and the like.

On the other hand, the taxes which a person can recover from some other person but the liability of which remains of the person collecting such taxes are indirect taxes.

These are custom duty, excise, service tax, vat, CST and the like

Answer: (d)

In economics, economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences, the (equilibrium) values of economic variables will not change.

The condition of equilibrium of income is the equality of intended saving and intended investment. An economy is in equilibrium when total savings equal total investment.

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)

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.