public finance fiscal & monetary policy section 7 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 CAPFs SI 2015]
A tax is said to be regressive when its burden falls
a) None of these
b) more heavily on the poor than on the rich
c) less heavily on the poor than on the rich
d) equally on the poor as on the rich
Answer »Answer: (b)
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich.
There is an inverse relationship between the tax rate and the taxpayer’s ability to pay, as measured by assets, consumption, or income.
These taxes tend to reduce the tax burden of the well-to-do, as they shift the burden disproportionately to the needy.
Question : 22
Match columns A and B wherein Column B defines Column A Column B I. a. II. b. III. c.
Column A | Column B |
I. Capital expenditure | 1. Includes interest payments, subsidies, defence expenditure |
II. Plan expenditure | 2. Includes loans to PSUs, states, foreign governments |
III. Revenue expenditure | 3. Includes expenditure on central plans such as agriculture, rural development, irrigation, transport, communications, environment and welfare schemes |
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)
All asset creating and productive expenditure is part of plan expenditure, and all non-productive, consumptive and non- asset-building expenditure is part of non-plan expenditure.
Non-plan expenditure is further divided into revenue expenditure and capital expenditure
Question : 23 [SSC LDEO 2013]
The non-expenditure costs which arise when the producing firm itself owns and supplies certain factors of production are
a) Replacement costs
b) Original costs
c) Explicit costs
d) Implicit costs
Answer »Answer: (d)
In economics, an implicit is the opportunity cost equal to what a firm must give up in order to use factors which it neither purchases nor hires.
It is the opposite of an explicit cost, which is borne directly. In other words, an implicit cost is any cost that results from using an asset instead of renting, selling, or lending it. These are costs a business incurs without actually spending money.
Question : 24 [SSC CHSL 2014]
The theory of “Maximum Social Advantage” in Public Finance was given by
a) Dalten
b) Musgrave
c) Robbins
d) Findley
Answer »Answer: (a)
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton.
According to Dalton, “The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."
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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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