public finance fiscal & monetary policy section 4 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 : 21 [SSC CPO 2006]
Which of the following is not viewed as national debt ?
a) Provident Fund
b) Long-term Government Bonds
c) Life Insurance Policies
d) National Savings Certificates
Answer »Answer: (c)
Government debt (also known as public debt, national debt) is the debt owed by a central government. Government debt is one method of financing government operations, but it is not the only method.
Governments can also create money to monetize their debts, thereby removing the need to pay interest. But this practice simply reduces government interest costs rather than truly cancelling government debt. Governments usually borrow by issuing securities, government bonds and bills.
Less creditworthy countries sometimes borrow directly from a supranational organization (e.g. the World Bank) or international financial institutions.
Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.
Question : 22
Which of the following precautions has to be taken by a country going for foreign aid?
- Keeping foreign aid strings-free
- Keeping the borrowing level low so that country does not fall into a debt trap
a) 1 only
b) Both 1 and 2
c) 2 only
d) Neither 1 nor 2
Answer »Answer: (b)
A country going for foreign aid has to take several precautions.
However, two major precautions are: Keeping the borrowing level low so that country does not fall into a debt trap, and Keeping foreign aid strings-free
Question : 24 [SSC GL 2013]
“Functional Finance” is associated with :
a) Abba ‘P’ Lerner
b) Adam Smith
c) Adolph Wogner
d) Adams
Answer »Answer: (a)
Functional finance is an economic theory proposed by Abba P. Lerner, based on the effective demand principle and chartism.
It states that government should finance itself to meet explicit goals, such as taming the business cycle, achieving full employment, ensuring growth, and low inflation.
Question : 25
With reference to ‘Central excise duty’, which of the following statements is/are correct?
- Commodities on which state governments impose excise duties are exempted from the central excise duty
- In recent years large number of goods has come under excise duty. Moreover, the rates of these duties have also been increasing
- Commodities which are produced within the country levied by central excise duty
a) 1 only
b) 3 only
c) 1 and 2
d) 1, 2 and 3
Answer »Answer: (d)
The commodities which are produced within the country are levied by central excise duty.
However, commodities on which state governments impose excise duties (e.g., liquor, drugs) are exempted from the central excise duty
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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
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» 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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