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

Answer: (d)

Primary deficit is fiscal deficit minus interest payments. India started using this term in 1997- 98.

Primary deficit is considered a very useful tool in helping bring more transparency in the government’s pattern of expenditure. It shows the current state of government finances.

If interest payments are deducted from a fiscal deficit, then it will obviously show a lesser deficit for that year as the interest payments are on account of loans taken in the past and not in the present year

Answer: (b)

In economics, tax incidence is the analysis of the effect of a particular tax on the distribution of economic welfare. Tax incidence is said to "fall" upon the group that ultimately bears the burden of, or ultimately has to pay, the tax.

Answer: (b)

Corporation Tax is imposed by State as well as Central Government. Corporation tax is imposed on the income or capital of some types of legal entities. The taxes may also be referred to as income tax.

Answer: (d)

Answer: (b)

The Reserve Bank of India is the nodal agency for implementing the monetary policy. RBI has defined its monetary policy in terms of “adequate financing of economic growth and at the same time ensuring reasonable price stability”.