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
- Corporation tax
- Tax on income
- Wealth tax
- Customs duty
- Excise duty
(a) 1, 2 and 3
(b) 2 and 3
(c) 1, 2, 4 and 5
(d) 1, 3, 4 and 5
The correct answers to the above question in:
Answer: (a)
Corporation Tax, Wealth Tax and Income Tax are in the category of direct tax.
Practice Fiscal Policy, Public Finance and Monetary Policy (public finance fiscal & monetary policy section 1) Online Quiz
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Read more public finance fiscal and monetary policy Based Indian Economy Questions and Answers
Question : 1
A mixed economy refers to an economic system where
a) No foreign investment is allowed
b) Only the private sector operates under government control
c) The economy functions with foreign collaboration
d) Both the government and the private sectors operate sectors operate simultaneously
Answer »Answer: (d)
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies.
The basic idea of the mixed economy is that the means of production are mainly under private ownership; that markets remain the dominant form of economic coordination; and that the government wields indirect influence over the economy through fiscal and monetary policies.
Question : 2
Which of the following statements is/are correct with reference to Primary deficit?
- India started using this term since 1997-98
- Primary deficit is fiscal deficit minus interest payments
- It shows the current state of government finances
a) 1 only
b) 3 only
c) 1 and 2
d) 1, 2 and 3
Answer »Answer: (d)
Primary deficit is fiscal deficit minus interest payments. India started using this term in 1997- 98.
Primary deficit is considered a very useful tool in helping bring more transparency in the government’s pattern of expenditure. It shows the current state of government finances.
If interest payments are deducted from a fiscal deficit, then it will obviously show a lesser deficit for that year as the interest payments are on account of loans taken in the past and not in the present year
Question : 3
The incidence of Tax refers to
a) Who transfers the Tax burden ?
b) Who bears the burden of Tax ?
c) Who pays the Tax ?
d) How Taxes can be shifted ?
Answer »Answer: (b)
In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall" upon the group that ultimately bears the burden of, or ultimately has to pay, the tax.
Question : 4
Deficit financing is an instrument of
a) tax policy
b) credit policy
c) monetary policy
d) fiscal policy
Answer »Answer: (d)
In economics, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy.
The two main instruments of fiscal policy are government taxation and expenditure. Deficit financing is defined as financing the budgetary deficit through public loans and the creation of new money.
Deficit financing in India means the expenditure in excess of current revenue and public borrowing.
Question : 5
If a government budgets for a surplus and there is an unexpected increase in the level of economic activity, which of the following is likely to occur?
a) There will be an increase in tax revenues and an increase in the budget surplus
b) There will be a decrease in tax revenues and a decrease in the budget surplus
c) There will be an increase in tax revenues and a decrease in the budget
d) There will be a decrease in tax revenues and an increase in the budget surplus
Answer »Answer: (a)
Question : 6
Fiscal responsibility and Budget Management Act was enacted in India in the year
a) 2003
b) 2002
c) 2007
d) 2005
Answer »Answer: (a)
GET Fiscal Policy, Public Finance and Monetary Policy PRACTICE TEST EXERCISES
public finance fiscal & monetary policy section 1
public finance fiscal & monetary policy section 2
public finance fiscal & monetary policy section 3
public finance fiscal & monetary policy section 4
public finance fiscal & monetary policy section 5
public finance fiscal & monetary policy section 6
public finance fiscal & monetary policy section 7
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