public finance fiscal & monetary policy section 7 MCQ Questions & Answers Detailed Explanation

Answer: (c)

Answer: (c)

An excise or excise tax (sometimes called a duty of excise special tax) is an inland tax on the sale, or production for sale, of specific goods or a tax on a good produced for sale, or sold, within a country or licenses for specific activities.

Excises are distinguished from customs duties, which are taxes on importation. Excises are inland taxes, whereas customs duties are border taxes.

Answer: (c)

Fiscal deficit is budget deficit plus borrowings and other liabilities.

Fiscal deficit = Budget deficit + Government’s market borrowing and liabilities.

The fiscal deficit situation shows whether the government is spending beyond its income. India has, unfortunately, been a country prone to constant and high fiscal deficit situations.

A high fiscal deficit implies high indebtedness of the government and a deficit above 3% in the Indian context means an alarming situation for the government finances

Answer: (d)

Answer: (a)

The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton.

According to Dalton, “The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."

Answer: (d)

In economics, an implicit is the opportunity cost equal to what a firm must give up in order to use factors which it neither purchases nor hires.

It is the opposite of an explicit cost, which is borne directly. In other words, an implicit cost is any cost that results from using an asset instead of renting, selling, or lending it. These are costs a business incurs without actually spending money.