public finance fiscal & monetary policy section 2 MCQ Questions & Answers Detailed Explanation

Answer: (a)

Value added is an economic term to express the difference between the value of goods and the cost of materials or supplies that are used in producing them.

It is a measure of economic activity which eliminates the duplication inherent in the sales value figure which results from the use of products of some establishments as materials or services by others.

So it is of goods and services less cost of intermediate goods and services.

Answer: (b)

General Anti Avoidance Rules (GAAR) has been introduced as a very important component of the Direct Tax code with the objective of preventing such deals and transactions that are carried out to evade and avoid paying taxes.

In other words, GAAR seeks to prevent such transactions that are carried out by way of aggressive tax planning so as to avoid paying taxes

Answer: (a)

Flight of capital refers to the movement of money from one investment to another in search of greater stability or increased returns.

Sometimes, it specifically refers to the movement of money from investments in one country to another in order to avoid country-specific risk (such as high inflation or political turmoil) or in search of higher returns.

Capital flight is seen most commonly in massive foreign capital outflows from a specific country, often at times of currency instability.

Answer: (d)

Treasury Bills are money market instruments to finance the short term financial requirements of the Government of India. These are discounted securities and are issued at a discount to face value.

Answer: (c)

Lok Sabha approval is mandatory in order to take out money from the Consolidated fund