public finance fiscal & monetary policy section 3 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
- Prime Minister
- Finance Minister
- President
- Public
(a) 1 only
(b) 3 only
(c) 2 only
(d) 3 and 4
The correct answers to the above question in:
Answer: (b)
Under Article 280 of the Constitution, the President appoints a Finance Commission every five years
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Read more public finance fiscal and monetary policy Based Indian Economy Questions and Answers
Question : 1
Tarapore Committee submitted its report on “Full Convertibility on Rupee” in-
a) Current account
b) Special Drawing Rights (SDRs)
c) Capital account
d) Both in current as well as in capital account
Answer »Answer: (c)
Question : 2
A tax is characterised by horizontal equity if its liability is
a) the same for every tax payer
b) similar for tax payers in similar circumstances
c) proportional to the income of tax payers
d) proportional to the expenditure of tax payers
Answer »Answer: (c)
The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual’s ability to pay. The idea of the ability to pay principle considers whether or not it is fair to tax someone higher just because that person has the ability and resources to pay.
If it is decided that they should be required to pay more, the question of how much more arises.
These questions can be analyzed through horizontal and vertical equity which are subsets of the ability-to-pay principle. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes.
Vertical equity is the idea that people who have a higher ability to pay more than those who have a lower ability to pay, as long as the increase in tax level is considered to be reasonable.
Question : 3
Convertibility of rupee implies
a) being able to convert rupee notes into gold
b) developing an international market for currencies in India
c) allowing the value of rupee to be fixed by market forces
d) freely permitting the conversion of rupee to other currencies and vice versa
Answer »Answer: (d)
Convertibility of rupee implies freely permitting the conversion of rupee to other currencies and vice versa.
Currency Convertibility is the ease with which a country’s currency can be converted into gold or another currency.
Question : 4
States’ debt does not include:
a) loos from State Bank of India
b) treasury bills issued to inter-national financial institutions
c) loans from the Central government
d) provident fund
Answer »Answer: (b)
Question : 5
Which of the following is a type of the Public expenditure in India?
- Plan
- Non-plan
a) 1 only
b) 1 and 2
c) 2 only
d) Neither 1 nor 2
Answer »Answer: (b)
Question : 6
‘Golden Handshake Scheme’ is associated with
a) voluntary retirement
b) private investment in public enterprises
c) inviting foreign companies
d) establishing joint enterprises
Answer »Answer: (a)
The voluntary retirement scheme (VRS) is the most humane technique to provide an overall reduction in the existing strength of the employees. It is a technique used by companies for trimming the workforce employed in the industrial unit.
It is also known as the ‘Golden Handshake’ as it is the golden route to retrenchment.
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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