taxes types, methods & budgeting process section 3 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 1

Consider the following statements about the Agriculture Income Tax

1. Agriculture Income Tax is levied and collected by the Union Government.
2. Agriculture Income Tax is levied throughout the country in India.

a) Both 1 and 2

b) 1 only

c) 2 only

d) Neither 1 nor 2

Question : 2 [UP-PCS 2011]

MODVAT is related to

a) Wealth Tax

b) Excise duty

c) Value added Tax (VAT)

d) Income Tax

Question : 3 [BPSC (Pre) 2002]

Which of the following are the indirect tax?

a) Income tax and Wealth tax

b) Sales tax and Excise tax

c) Sales tax and Income tax

d) Income tax and Excise tax

Question : 4

The term ‘Crowd-out’ in the economy is related to which of the following:

1. Increased public sector spending replaces private sector spending
2. Governments deficit spending through borrowed money leads to hardening of interest rates
3. Government spending uses up financial resources that would otherwise be used by private firms
4. Government providing a service or good that would otherwise be a business opportunity for private industry

a) (i) & (ii) only

b) (ii) & (iii) only

c) (i) only

d) All of the above

Question : 5

Consider the following statements regarding the “Inverted Duty Structure” in international trade:

1. It makes domestic manufactured goods less competitive against finished product imports in the domestic market.
2. Finished goods are taxed at a higher rate than the raw materials
3. Raw materials are taxed at a higher rate than the finished products
4. This has reference to Customs Duty

a) (i) & (iii) only

b) (i) & (iv) only

c) (i) & (ii) only

d) (i), (iii) & (iv) only