taxes types, methods & budgeting process section 5 Practice Questions Answers Test with Solutions & More Shortcuts
Taxes Types, Methods & Budgeting Process PRACTICE TEST [6 - EXERCISES]
taxes types, methods & budgeting process section 1
taxes types, methods & budgeting process section 2
taxes types, methods & budgeting process section 3
taxes types, methods & budgeting process section 4
taxes types, methods & budgeting process section 5
taxes types, methods & budgeting process section 6
Question : 6
Consider the following statements regarding Forex Reserves:
- The country’s Forex Reserves fully covers the external debt
- The country’s Forex Reserves fully covers its one-year imports of goods and services
a) (ii) only
b) Both (i) & (ii)
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (d)
The country’s forex reserves as of the end of Feb 2020 stood at $476 billion, but India’s external debt crossed 557 billion USD as of June 2019 (and it is still increasing with time).
So, at any point in time, if we want to pay off the complete external debt, it is not possible as forex reserve is only $476 billion.
(As all external debt is denominated in foreign currencies and hardly $1 billion is in rupee debt (Masala bonds), so it has to be paid only through our Forex reserve).
Since the ratio of Forex to External debt is $476/ 557 = 85%, that means our forex reserves don’t cover the external debt.
If it would have been greater than 100% then we say that our external debt is fully covered (with forex reserves).
The country’s one-year imports are around $630 billion (2018-19). So again, our forex reserves don’t fully cover imports also.
Question : 7
Which of the following is associated with fiscal policy?
a) Consumption
b) Inflation
c) Taxation
d) Money supply
Answer »Answer: (a)
Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are changes in the level and composition of taxation and government spending in various sectors.
Question : 9
Consider the following statements regarding the "Composition Scheme" in GST:
- It exempts small taxpayers from payment of GST
- It allows small businesses to pay tax at a fixed per cent of their turnover
- It reduces the compliance cost for small businesses
a) (i) & (iii) only
b) (ii) only
c) (i) only
d) (ii) & (iii) only
Answer »Answer: (d)
Composition levy is an alternative method of levy of tax designed for small businesses whose turnover is up to Rs. 1.5 crore (and above 40 lacs). The objective of the composition scheme is to bring simplicity and to reduce the compliance cost for small businesses.
Moreover, it is optional and the eligible person opting to pay tax under this scheme can pay tax at a 1% flat rate, of his turnover, instead of paying tax at the normal GST rate.
Similarly, small service providers with a turnover of Rs. 50 lakhs can opt for a composition scheme and pay GST at 6%. In the case of a composition scheme, the businesses can’t claim an input tax credit.
Question : 10 [UPPCS (Mains) 2010]
Which among the following are true for Central Sales Tax?
- It is levied on interstate trade.
- It is levied in the Union Territories.
- It is levied in the SEZ.
a) Only 2
b) Only 2 and 3
c) Only 1 and 2
d) All of these
Answer »Answer: (c)
IMPORTANT indian economy mcq EXERCISES
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Top 500+ Indian Taxation System GK MCQ Quiz For SSC »
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Top 500+ Taxes Types & Budgeting Process GK MCQ Quiz PDF »
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499+ Tax Slab Types Benefits And Penalty GK MCQ Quiz PDF »
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New 499+ Indian Taxation Laws Budget Current GK MCQ Quiz »
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New 500+ Indian Income Tax Slab Laws Acts GK MCQ Quiz PDF »
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1000+ Indian Tax System Types Concepts MCQ Quiz For IBPS »
Taxes Types, Methods & Budgeting Process 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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