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

Answer: (a)

There are two types of budgets

i.e., Revenue budget and Capital budget. The revenue budget contains all current receipts, such as taxation, (central excise, customs duty, corporation tax) dividends of public sector units (PSU’s) and expenditure of the government.

The capital budget consists of all capital receipts and expenditures such as domestic and foreign loans, loan repayment, foreign and etc.

Answer: (b)

The tax to GDP ratio (centre and states together) was 6 percent in 1950-51, rose to 11.89 in 2007-08 and is currently around 10.60%

Answer: (d)

In economics, economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences, the (equilibrium) values of economic variables will not change.

The condition of equilibrium of income is the equality of intended saving and intended investment. An economy is in equilibrium when total savings equal total investment.

Answer: (c)

Service tax was introduced in 1994-95 to address the asymmetric and distortionary treatment of goods and services in tax framework and to widen the tax net

Answer: (b)

1. Fiscal deficit is excess of total expenditure over total receipts less borrowing.
2. Budget deficit is excess of total expenditure over total receipts.
3. Revenue deficit is excess of revenue expenditure over revenue receipts.
4. Primary deficit is excess of total expenditure over total receipts less borrowings and interest payments.