public finance fiscal & monetary policy section 6 MCQ Questions & Answers Detailed Explanation

Question : 1

Current account in the Balance of Payment comprise is ___?

a) difference of total exports and imports in one year

b) trade balance plus invisible balance

c) invisible account like tourism, shipping, insurance, etc.

d) transactions like net external assistance, NRI deposits, etc.

Question : 2

Mixed Economy means :

a) Co-existence of small and large industries

b) Co-existence of public and private sectors

c) Promoting both agriculture and industries in the economy

d) Co-existence of rich and poor

Question : 3

Which one of the following statements regarding the levying, collecting, and distribution of Income Tax is correct?

a) The Union levies, collects, and distributes the proceeds of income tax between itself and the states.

b) Only the surcharge levied on income tax is shared between the Union and the states.

c) The Union levies, collects, and keeps all the proceeds of income tax itself.

d) The Union levies and collects the tax but all the proceeds are distributed among the states

Question : 4

The process of budget making after re-evaluating every item of expenditure in every financial year is known as-

a) Performance Budgeting

b) Fresh Budgeting

c) Deficit Budgeting

d) Zero Based Budgeting

Question : 5

Which of the following statements is incorrect about Repo and Reverse Repo?

1. At present, the repo rate is 11.75%
2. At present, the reverse repo rate is 5.75%
3. Repo rate is the rate at which RBI lends to commercial banks
4. Reverse Repo is the rate at which RBI borrows from commercial banks

a) 1 only

b) 1, 3 and 4

c) 1 and 2

d) None of the above

Question : 6

Which one of the following is the most appropriate reason for Inequalities in Income ?

a) Differences in Ability

b) Lack of opportunities

c) Racial factors

d) Inheritance from family Environment