public finance fiscal & monetary policy section 2 Practice Questions Answers Test with Solutions & More Shortcuts
Fiscal Policy, Public Finance and Monetary Policy PRACTICE TEST [7 - 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
Question : 26
Match columns A and B wherein Column B defines Column A
Column A | Column B |
I. External debt | a. Includes small saving schemes, provident fund, reserve fund railways |
II. Internal debt | b. Includes loans from foreign countries and international financial institutions |
III. Other internal liabilities | c. Includes market loans from banks and financial institutions |
a) I-c, II-a, III-b
b) I-a, II-d, III-b
c) I-b, II-c, III-a
d) I-b, II-a, III-c
Answer »Answer: (c)
Internal debt, Other internal liabilities and External debt are three components of Public debt wherein Internal debt include market loans from banks and financial institutions, short-term borrowings on treasury bills and other bonds and certificates issued by the government.
External debt includes loans from foreign countries and international financial institutions like the World Bank, IMF, ADB, etc.
Other internal liabilities includes small saving schemes, provident fund, a reserve fund of the railways, post and telegraph on which the central government has to pay interest
Question : 27 [SSC MTS 2013]
Custom duty is an instrument of
a) Fiscal Policy
b) Foreign Trade Policy
c) Monetary Policy
d) Industrial Policy
Answer »Answer: (b)
Custom duty is a tax on imports imposed on an ad valorem basis, i.e, fixed in the form of a percentage on the value of the commodity imported.
Question : 28
Which of the following is/are the components of Public debt?
- External debt
- Other internal liabilities
- Internal debt
a) 1 only
b) 3 only
c) 1 and 2
d) 1, 2 and 3
Answer »Answer: (d)
Public debt has three components -
- Internal debt,
- Other internal liabilities and
- External debt
Question : 29 [SSC CGL 2010]
A short-term government security paper is called
a) Treasury bill
b) Debenture
c) Share
d) Mutual fund
Answer »Answer: (a)
Treasury bills are instruments of short-term borrowing by the Government of India, issued as promissory notes under discount.
The interest received on them is the discount which is the difference between the price at which they are issued and their redemption value. They have assured yield and negligible risk of default. They are thus useful in managing short-term liquidity.
At present, the Government of India issues three types of treasury bills through auctions, namely, 91-day, 182-day and 364-day. There are no treasury bills issued by State Governments.
Question : 30 [SSC CGL Pre 1999]
A financial instrument is called a ‘primary security’ if it represents the liability of :
a) a commercial bank
b) the Government of India
c) some ultimate borrower
d) a primary cooperative bank
Answer »Answer: (c)
Instruments (certificates) issued by the ultimate borrower are called primary securities. Instruments issued by intermediaries on behalf of the ultimate borrower are called indirect securities.
The market for instruments (also called securities) issued for the first time, is called the primary market.
Primary security is the asset created out of the credit facility extended to the borrower and/or which are directly associated with the business/project of the borrower for which the credit facility has been extended.
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Fiscal Policy, Public Finance and Monetary Policy Shortcuts »
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indian economy MCQ CATEGORIES
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» Introduction to Indian Economy
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» Planning, Economic Development & Five year Plans
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» National Income & Human Development Index
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» Agriculture Sector, Subsidy and Food Processing
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» Industries, Manufacturing & Service Sectors
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» Inclusive growth, Sustainable development and employment
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» Poverty & Unemployment
-
» Introduction to Micro Economics
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» Introduction to Macro Economics
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» Macro fundamentals, GDP, Investment, Growth
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» Demand & Supply, Profit Loss, Inflation & Price Index
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» Fiscal Policy, Public Finance and Monetary Policy
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» Money Supply, Banking and Financial Institutions
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» Taxes Types, Methods & Budgeting Process
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» Banking, Security Market & Insurance
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