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 : 26 [SSC SO 2006]
If the tax rate increases with the higher level of income, it shall be called
a) Regressive tax
b) Progressive tax
c) Proportional tax
d) Lump sum tax
Answer »Answer: (b)
A progressive tax is a tax by which the tax rate increases as the taxable base amount increases.” Progressive” describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax rate.
It can be applied to individual taxes or to a tax system as a whole; a year, multi-year, or lifetime.
Progressive taxes attempt to reduce the tax incidence of people with a lower ability-to-pay, as they shift the incidence increasingly to those with a higher ability-to-pay.
Question : 27
Consider the following statements regarding the Fourteenth Finance Commission:
- It would recommend on sharing of tax proceeds between the centre and the states which will apply for a five-year period beginning April 1, 2014.
- To suggest steps for pricing of public utilities, such as electricity and water.
- It would review the state of finances, deficit and debt levels of the centre and states.
a) 1 and 3 only
b) 2 and 3 only
c) 1 and 2only
d) 1, 2 and 3
Answer »Answer: (b)
Fourteenth finance commission would recommend on sharing of tax proceeds between the Centre and the states which will apply for a five-year period beginning April 1, 2015.
It will suggest steps for the pricing of public utilities such as electricity and water. It would review the state of finances, deficit and debt levels of the Centre and states.
Question : 28
With reference to Indian economy, consider the following.
- Bank rate
- Open market operations
- Public debt
- Public revenue
a) 1 only
b) 1 and 2
c) 2, 3 and 4
d) 1, 3 and 4
Answer »Answer: (b)
The RBI implements the monetary policy through open market operations, bank rate policy, reserve system, credit control policy, moral persuasion and through many other instruments.
Question : 29
Match the following:
List I | List II |
1. 11th Finance Commission | A. 2002 |
2. 12th Finance Commission | B. 2007 |
3. 13th Finance Commission | C. 2013 |
4. 14th Finance Commission | D. 1998 |
a) C A D B
b) A B C D
c) B A C D
d) D A B C
Answer »Answer: (d)
11th Finance Commission was appointed in 1998, 12th in 2002, 13th in 2007 and 14th in 2013.
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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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