taxes types, methods & budgeting process section 3 MCQ Questions & Answers Detailed Explanation
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The following question based on Taxes Types, Methods & Budgeting Process topic of indian economy mcq
- Agriculture Income Tax is levied and collected by the Union Government.
- Agriculture Income Tax is levied throughout the country in India.
(a) Both 1 and 2
(b) 1 only
(c) 2 only
(d) Neither 1 nor 2
The correct answers to the above question in:
Answer: (d)
Agricultural income tax is levied on the income from Agriculture.
At present agriculture is subjected to – two direct taxes and they are Agricultural Income Tax and Land Tax.
They are levied by the state governments. Not all states levy agricultural income tax.
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Read more taxes types methods budgeting process Based Indian Economy Questions and Answers
Question : 1
MODVAT is related to
a) Wealth Tax
b) Excise duty
c) Value added Tax (VAT)
d) Income Tax
Answer »Answer: (c)
MODVAT e.g. modified value added tax is related to Value added tax e.g. VAT.
Question : 2
Which of the following are the indirect tax?
a) Income tax and Wealth tax
b) Sales tax and Excise tax
c) Sales tax and Income tax
d) Income tax and Excise tax
Answer »Answer: (b)
Question : 3
The term ‘Crowd-out’ in the economy is related to which of the following:
- Increased public sector spending replaces private sector spending
- Governments deficit spending through borrowed money leads to hardening of interest rates
- Government spending uses up financial resources that would otherwise be used by private firms
- Government providing a service or good that would otherwise be a business opportunity for private industry
a) (i) & (ii) only
b) (ii) & (iii) only
c) (i) only
d) All of the above
Answer »Answer: (d)
When the government borrows more, then there may be a decrease in private investment due to a reduction in the amount of savings available to the private sector.
This is because if the government decides to borrow from the private citizens by issuing bonds to finance deficits, these bonds (which are risk-free) compete with corporate bonds and other financial instruments for the available supply of funds.
If people decide to buy government bonds, the funds remaining to be invested in the private sector will be less.
Thus, some private/corporate borrowers will get "crowded out" of the financial markets as the government claims an increasing share of the economy's total savings.
This also increases the interest rate for the private sector.
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taxes types, methods & budgeting process section 1
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taxes types, methods & budgeting process section 6
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