public finance fiscal & monetary policy section 3 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 11

Who among the following appoints a Finance Commission under Article 280 of the Constitution?

1. Prime Minister
2. Finance Minister
3. President
4. Public

a) 1 only

b) 3 only

c) 2 only

d) 3 and 4

Question : 12

Tarapore Committee submitted its report on “Full Convertibility on Rupee” in-

a) Current account

b) Special Drawing Rights (SDRs)

c) Capital account

d) Both in current as well as in capital account

Question : 13 [SSC SO 2001]

A tax is characterised by horizontal equity if its liability is

a) the same for every tax payer

b) similar for tax payers in similar circumstances

c) proportional to the income of tax payers

d) proportional to the expenditure of tax payers

Question : 14

Convertibility of rupee implies

a) being able to convert rupee notes into gold

b) developing an international market for currencies in India

c) allowing the value of rupee to be fixed by market forces

d) freely permitting the conversion of rupee to other currencies and vice versa

Question : 15

Consider the following statements with regard to Statutory Liquidity Ratio (SLR)

1. To meet SLR, Commercial banks can use cash only.
2. SLR is maintained by the banks with themselves.
3. SLR restricts the banks leverage in pumping more money into the economy.

a) 1, 2 and 3

b) 2 and 3

c) 1 and 3

d) only 2