public finance fiscal & monetary policy section 5 MCQ Questions & Answers Detailed Explanation

Question : 1

Taxes are as certain as the death, because

a) Government has its own budget constraints.

b) Government have no other source of revenue.

c) They constitute the major source of government revenue.

d) Most PSUs are run inefficiently.

Question : 2

Excess of total expenditure over total revenues is termed as

1. Revenue deficit
2. Fiscal deficit
3. Budget deficit
4. Overall deficit

a) 1 only

b) 3 only

c) 1 and 2

d) 4 only

Question : 3

With reference to the Indian Public Finance, consider the following statements.

1. External liabilities reported in the Union Budget are based on historical exchange rates.
2. The continued high borrowing has kept the real interest rates high in the economy.
3. The upward trend in the ratio of Fiscal Deficit to GDP in recent years has an adverse effect on private investments.
4. Interest payments is the single largest component of the non-plan revenue expenditure of the Union Government.

a) 1, 2 and 3

b) 2, 3 and 4

c) 1 and 4

d) 1, 2, 3 and 4

Question : 4

Ad Valorem tax is levied

a) according to value added by the finance ministry

b) according to value addition to a commodity

c) according to value added by the Government.

d) according to value given by producers