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

Answer: (d)

The excise duty’s share in the total tax revenue, which was 41.3 per cent in 1992-93, declined to 25.1 per cent in 2006-07.

The customs duty’s share in the total tax revenue, which was 31.9 per cent in 1992- 93, fell to 17.5 per cent in 2006-07, as a result of massive structuring on excise and customs.

Answer: (b)

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.

The official goals usually include relatively stable prices and low unemployment. The contraction of the monetary supply can be achieved indirectly by increasing the nominal interest rates.

Monetary authorities in different nations have differing levels of control of economy-wide interest rates.

Answer: (b)

Planned economic development adopted by India required an active monetary policy. The two stated aims of this policy were to boost economic development and control inflationary pressure

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)

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: (d)

The classical breakdown of all economic sectors is: primary, secondary and tertiary. However, on the basis of ownership, the sectors are: business sector, private sector (privately run businesses), public sector (state sector) and voluntary sector.