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

Answer: (d)

Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.

Answer: (b)

Disinvestment is a process where Government sells its equity holding to private sectors. In other ways it is a privatization process where private parties are given shareholding in Government undertakings either wholly or partially.

Answer: (b)

Answer: (a)

Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending.

This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit of this type of tax scheme is the removal of double taxation.

Answer: (b)

Answer: (d)

A Central Securities Depository (CSD) is an organization holding securities either in certificated or un-certificated (dematerialized) form, to enable the book-entry transfer of securities.

In some cases, these organizations also carry out centralized comparison and transaction processing such as clearing and settlement of securities.

The physical securities may be immobilized by the depository or securities may be dematerialized (so that they exist only as electronic records).

The following are depository services:

• Demat accounts;
• Dematerialization;
• Rematerialization;
• Transfer of securities; and
• Pledge services.