public finance fiscal & monetary policy section 7 MCQ Questions & Answers Detailed Explanation
MOST IMPORTANT indian economy mcq - 7 EXERCISES
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The following question based on Fiscal Policy, Public Finance and Monetary Policy topic of indian economy mcq
- Fiscal deficit = Budget deficit – Government’s market borrowing and liabilities
- Fiscal deficit = Budget deficit + Government’s market borrowing and liabilities
- Fiscal deficit = Revenue expenditure – Budget receipts
- Fiscal deficit = Revenue expenditure + Budget receipts
(a) 1 only
(b) 3 only
(c) 2 only
(d) None of the above
The correct answers to the above question in:
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
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Question : 1
The acronym SRO, being used in the capital market for various market participants, stands for which one of the following?
a) Securities Roll-back Operators
b) Small Revenue Operators
c) Self regulatory Organisations
d) Securities Regulatory Organisations
Answer »Answer: (c)
A self-regulatory organization (SRO) is a nongovernmental organization that has the power to create and enforce industry regulations and standards.
The priority is to protect investors through the establishment of rules that promote ethics and equality
Question : 2
With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure?
- Defence expenditure
- Interest payments
- Salaries and pensions
- Subsidies
a) 1 only
b) 1, 2, 3 and 4
c) 2 and 3 only
d) None
Answer »Answer: (b)
Non-plan expenditure covers
- interest payments,
- subsidies (mainly on food and fertilisers),
- wage and salary payments to government employees,
- grants to States and Union Territories governments,
- pensions,
- police,
- economic services in various sectors,
- defence,
- loans to public enterprises,
- loans to States, Union Territories and foreign governments.
Question : 3
Which of the following is/are the major Objectives of Deficit financing?
- Used as an instrument of economic policy
- It is used as a tool for meeting financial needs of government
- Used for the mobilization of surplus, non- utilized and idle resources in the economy
a) 1 only
b) 3 only
c) 1 and 2
d) 1, 2 and 3
Answer »Answer: (d)
In under-developed countries, deficit-financing has been considered essential for financing the plans of economic development. It is used as a tool for meeting the financial needs of the government, especially in times of war.
It is used for the mobilization of surplus, non-utilized and idle resources in the economy. It is also used as an instrument of economic policy for removing the conditions of depression 4 to raise the level of output and employment.
Question : 4
Excise duty on a commodity is payable with reference to its
a) production, transportation and sale
b) production and sale
c) production
d) production and transportation
Answer »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.
Question : 5
Which of the following economists, introduced fiscal policy as a tool to rectify the Great Depression of 1929-30?
a) Prof. Crowther
b) Prof. Marshall
c) Prof. Keynes
d) Prof. Pigou
Answer »Answer: (c)
Question : 6
Which statements about indirect taxes in India are true?
- Yield from indirect taxes is more than that from direct taxes.
- Indirect taxes have grown faster than direct taxes after 1947.
- Indirect taxes are ultimately paid for by persons who do not actually pay taxes to the government.
- Increase in indirect taxes is good in a developing country.
a) 1, 2 and 4
b) 2 only
c) 1 and 2
d) 1, 2 and 3
Answer »Answer: (d)
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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