public finance fiscal & monetary policy section 4 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
(a) ad valorem tax on domestic final consumption collected at all stages between production and the point of final sale
(b) special tax levied by states on products from other states
(c) ad valorem tax on final consumption collected at manufacturing level
(d) tax on final consumption collected at the consumption stage
The correct answers to the above question in:
Answer: (a)
Practice Fiscal Policy, Public Finance and Monetary Policy (public finance fiscal & monetary policy section 4) Online Quiz
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Read more public finance fiscal and monetary policy Based Indian Economy Questions and Answers
Question : 1
Choose the correct one from the following.
- Revenue deficit = Revenue expenditure – Revenue receipts
- Revenue deficit = Revenue receipts – Revenue expenditure
- Revenue deficit = Revenue receipts – Total expenditure
- Revenue deficit = Revenue expenditure – Total receipts
a) 1 only
b) 3 only
c) 1 and 2
d) 1, 2, 3 and 4
Answer »Answer: (a)
Revenue deficit means the excess of current revenue expenditure over current revenue receipts. Revenue deficit indicates that the government cannot meet its current expenditure from its current revenue. Revenue deficit= Revenue expenditure – Revenue receipts
Question : 2
Which of the following is the process of bridging the gap between the revenue and expenditure?
- Multiple financing
- Bridge financing
- Accurate financing
- Deficit financing
a) 1 only
b) 3 only
c) 2 only
d) 4 only
Answer »Answer: (d)
The process of bridging the gap between the revenue and expenditure is called deficit financing. In other words, Deficit financing refers to the ways in which the budgetary gap is financed
Question : 3
In the context of the stock market, IPO stands for
a) International Payment Obligation
b) Internal Policy Obligation
c) Immediate Payment Order
d) Initial Public Offer
Answer »Answer: (d)
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time.
Through this process, a private company transforms into a public company. Initial public offerings are used by companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises.
A company selling shares is never required to repay the capital to its public investors. After the IPO, when shares trade freely in the open market, money passes between public investors.
Question : 4
What is referred to as ‘Depository Services’ ?
a) An advisory service to investors
b) A method for regulating stock exchanges
c) A new scheme of fixed deposits
d) An agency for safe-keeping of securities
Answer »Answer: (d)
It is a service offered by a securities depository under which the depository maintains book accounts recording the ownership of securities held on behalf of the depository’s participants, for eligible securities.
Question : 5
Interest on public debt is a part of :
a) interest payments by households
b) transfer payments by the Govt.
c) transfer payments by the enterprises
d) national income
Answer »Answer: (b)
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system.
These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services.
Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
Question : 6
Taxes on professions can be levied by :
a) Union government only
b) both by state and union government
c) State government only
d) by panchayats only
Answer »Answer: (c)
In India, the professional tax is imposed at the state level. However, not all the states impose this tax. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Professional tax is levied by particular Municipal Corporations.
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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