public finance fiscal & monetary policy section 6 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) 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.
The correct answers to the above question in:
Answer: (b)
Practice Fiscal Policy, Public Finance and Monetary Policy (public finance fiscal & monetary policy section 6) Online Quiz
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Question : 1
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
Answer »Answer: (b)
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism.
All modern economies are mixed where the means of production are shared between the private and public sectors.
Question : 2
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
Answer »Answer: (a)
Question : 3
With reference to the Finance Commission of India, which of the following statements is correct ?
a) It encourages the inflow of foreign capital for infrastructure development
b) None of the statements (a), (b) and (c) given above is correct in his context
c) It facilitates the proper distribution of finances among the Public Sector Undertakings
d) It ensures transparency in financial administration
Answer »Answer: (b)
The Commission shall make recommendations as to the following matters, namely :
- The distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under Chapter I Part XII of the Constitution and the allocation between the States of the respective shares of such proceeds;
- The principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India and the sums to be paid to the States which are in need of assistance by way of grantsin-aid of their revenues under article 275 of the Constitution for purposes other than those specified in the provisions to clause (1) of that article; and
- The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats and Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State.
Question : 4
When RBI announces an increase in Cash Reserve Ratio (CRR) it means:
a) The Union Government will have less money to lend.
b) The RBI will have less money to lend.
c) The commercial banks will have less money to lend.
d) The commercial banks will have more money to lend.
Answer »Answer: (c)
Cash reserve ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the available amount with the banks comes down.
Question : 5
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
Answer »Answer: (d)
Question : 6
Which of the following statements is incorrect about Repo and Reverse Repo?
- At present, the repo rate is 11.75%
- At present, the reverse repo rate is 5.75%
- Repo rate is the rate at which RBI lends to commercial banks
- 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
Answer »Answer: (a)
At present, the repo rate is 4.00%
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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