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) Gautam Mathur
(b) Kaldor
(c) Dalton
(d) Musgrave
The correct answers to the above question in:
Answer: (b)
Nicholas Kaldor’s seminal work, titled ‘An Expenditure Tax,’ was brought out in 1955. Kaldor asked to levy a tax on a person’s expenditure (consumption), instead of on his income.
When expenditure is made the basis of taxation, the problems created by the non-comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax.
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Question : 1
Paraellel economy emerges due to
a) Tax Estimation
b) Tax Evasion
c) Tax Avoidance
d) Tax Compliance
Answer »Answer: (b)
A parallel economy (black economy) indicates the functioning of an unsanctioned sector in the economy whose objectives run parallel with the social objectives.
A major contributory factor to such an economy is black money which is any money that a person or an organization acquires by a means that involves tax evasion.
It is that income from illegal activities that are not reported to the government for tax purposes.
Question : 2
Which of the following subjects does not figure in the Concurrent List of our Constitution ?
a) Trade unions
b) Protection of wild animals and birds
c) Stock Exchanges and futures markets
d) Forests
Answer »Answer: (c)
The Concurrent List or List-III is a list of 47 items given in Part XI of the Constitution of India, concerned with relations between the Union and States. Stock exchanges and futures markets come under the Union List.
Question : 3
A mixed economy works primarily through the
a) market mechanism guided by Government participation and planning
b) central allocative machinery
c) market mechanism
d) market mechanism regulated by Government policy
Answer »Answer: (a)
A 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 profit-seeking enterprises and the accumulation of capital remain the fundamental driving force behind economic activity.
However, unlike a free-market economy, the government would wield considerable indirect influence over the economy through fiscal and monetary policies designed to counteract economic downturns and capitalism’s tendency toward financial crises and unemployment, along with playing a role in interventions that promote social welfare.
Question : 4
Evaluating all the options to find out most suitable solution to business problems is inter-displinary activities. It is called
a) Commercial research
b) Management research
c) Professional research
d) Operational research
Answer »Answer: (d)
Operational research is a discipline that deals with the application of advanced analytical methods to help make better decisions.
Employing techniques from other mathematical sciences, such as mathematical modelling, statistical analysis, and mathematical optimization, operations research arrives at optimal or near-optimal solutions to complex decision-making problems.
In a nutshell, operations research (O.R.) is the discipline of applying advanced analytical methods to help make better decisions.
Question : 5
In India, disguised unemployment is generally observed in
a) All these sectors
b) the Factory sector
c) the Agricultural sector
d) the Service sector
Answer »Answer: (c)
As the word suggests, disguised unemployment refers to a situation when a person is apparently employed, but in effect unemployed. It is a phenomenon of concealed unemployment, not visible to the open eyes.
Here it is not possible to identify as to who are unemployed, as all “appear to be working.” Disguised unemployment is especially seen in the field of agriculture.
Most of the people are observed to be engaged in agriculture; however, in reality, a sufficient number of them are unemployed. Their contribution regarding production is negligible.
Question : 6
The sale proceeds of Government Bonds come under the budget head of
a) Capital Receipts
b) Current Expenditure
c) Revenue Receipts
d) Capital Outlay
Answer »Answer: (a)
Capital receipts are the funds received into the businesses that are not part of the operating activities of the establishment. Capital receipts primarily include external assistance, market loans, small savings, principal investment in bonds, and Government provident funds.
A capital receipt is a receipt that is derived from the sale or purchase of capital assets like plant and machinery, furniture, investment (long term) etc., which shall not be occurring all the time.
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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