public finance fiscal & monetary policy section 1 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 1

Fiscal Policy in India is formulated by

a) the Reserve Bank of India

b) the Securities and Exchange Board of India

c) the Planning Commission

d) the Finance Ministry

Answer: (d)

The Department of Economic Affairs (DEA) under Ministry of Finance is the nodal agency of the Union Government to formulate and monitor country’s economic policies and programmes having a bearing on domestic and international aspects of economic management.

Question : 2 [SSC SO 2003]

Basic infrastructure facilities in Economics are known as :

a) Working capital

b) Physical capital

c) Human capital

d) Social overheads capital

Answer: (d)

Social overheads capital is the capital spent on social infrastructures, such as schools, universities, hospitals, libraries.

They are capital goods of types that are available to anybody, hence social; and are not tightly linked to any particular part of the production, hence overhead.

Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.

Question : 3

Match columns A and B wherein Column B defines Column A

Column A Column B
I. Public Account a. Consists of all revenues and loans received by the government
II. Consolidated fund b. Comprises of the sum placed at the disposal of the President to meet unforeseen expenditure
III. Contingency fund c. Consists of receipts and payments, which are in form of deposit account with the government, such as provident funds, small savings, etc
Codes: I II III

a) I-c, II-a, III-b

b) I-a, II-d, III-b

c) I-a, II-b, III-c

d) I-b, II-a, III-c

Answer: (a)

The budget shows the receipts and payments of the government under three heads.

All revenues and loans received by the government comes under Consolidated fund, the sum placed at the disposal of the President to meet unforeseen expenditure falls under Contingency fund and receipts & payments which are in form of deposit account with the government comprises Public Account

Question : 4

Fiscal Policy in India is formulated by

a) the Finance Ministry

b) the Planning Commission

c) the Reserve Bank of India

d) the Securities and Exchange Board of India

Answer: (a)

The Department of Economic Affairs (DEA) under Ministry of Finance is the nodal agency of the Union Government to formulate and monitor country’s economic policies and programmes having a bearing on domestic and international aspects of economic management.

Question : 5

Which among the following is / are indirect taxes levied by Centre and state?

  1. Excise
  2. Custom
  3. Service tax
  4. Property tax
  5. Income tax
Choose the correct option from the codes given below:

a) 3 and 4

b) 1, 2 and 3

c) 1 and 2

d) 1, 2, 3 and 4

Answer: (b)

Excise tax, custom duty and service tax are all indirect taxes while property tax and income tax are direct taxes.

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