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MCQs

Total Questions : 217 | Page 1 of 22 pages
Question 1. Fiscal Policy in India is formulated by
  1.    the Reserve Bank of India
  2.    the Securities and Exchange Board of India
  3.    the Planning Commission
  4.    the Finance Ministry
 Discuss Question
Answer: Option D. -> the Finance Ministry
Answer: (d)The Department of Economic Affairs (DEA) under Ministry of Finance is the nodal agency of the Union Government to formulate and monitor country’s economic policies and programmes having a bearing on domestic and international aspects of economic management.
Question 2. Basic infrastructure facilities in Economics are known as :
  1.    Working capital
  2.    Physical capital
  3.    Human capital
  4.    Social overheads capital
 Discuss Question
Answer: Option D. -> Social overheads capital
Answer: (d)
Social overheads capital is the capital spent on social infrastructures, such as schools, universities, hospitals, libraries.
They are capital goods of types that are available to anybody, hence social; and are not tightly linked to any particular part of the production, hence overhead.
Because of their broad availability they often have to be provided by the government. Examples of social overhead capital include roads, schools, hospitals, and public parks.
Question 3. Match columns A and B wherein Column B defines Column A
Column A
Column B
I. Public Account
a. Consists of all revenues and loans received by the government
II. Consolidated fund
b. Comprises of the sum placed at the disposal of the President to meet unforeseen expenditure
III. Contingency fund
c. Consists of receipts and payments, which are in form of deposit account with the government, such as provident funds, small savings, etc
Codes: I II III
  1.    I-c, II-a, III-b
  2.    I-a, II-d, III-b
  3.    I-a, II-b, III-c
  4.    I-b, II-a, III-c
 Discuss Question
Answer: Option A. -> I-c, II-a, III-b
Answer: (a)
The budget shows the receipts and payments of the government under three heads.
All revenues and loans received by the government comes under Consolidated fund, the sum placed at the disposal of the President to meet unforeseen expenditure falls under Contingency fund and receipts & payments which are in form of deposit account with the government comprises Public Account
Question 4. Fiscal Policy in India is formulated by
  1.    the Finance Ministry
  2.    the Planning Commission
  3.    the Reserve Bank of India
  4.    the Securities and Exchange Board of India
 Discuss Question
Answer: Option A. -> the Finance Ministry
Answer: (a)The Department of Economic Affairs (DEA) under Ministry of Finance is the nodal agency of the Union Government to formulate and monitor country’s economic policies and programmes having a bearing on domestic and international aspects of economic management.
Question 5. Which among the following is / are indirect taxes levied by Centre and state?
  1. Excise
  2. Custom
  3. Service tax
  4. Property tax
  5. Income tax
Choose the correct option from the codes given below:
  1.    3 and 4
  2.    1, 2 and 3
  3.    1 and 2
  4.    1, 2, 3 and 4
 Discuss Question
Answer: Option B. -> 1, 2 and 3
Answer: (b)Excise tax, custom duty and service tax are all indirect taxes while property tax and income tax are direct taxes.
Question 6. Fiscal responsibility and Budget Management Act was enacted in India in the year
  1.    2003
  2.    2002
  3.    2007
  4.    2005
 Discuss Question
Answer: Option A. -> 2003
Answer: (a)
Question 7. Which of the following are included in the category of direct tax in India?
  1. Corporation tax
  2. Tax on income
  3. Wealth tax
  4. Customs duty
  5. Excise duty
Select the correct answer using the codes given below
  1.    1, 2 and 3
  2.    2 and 3
  3.    1, 2, 4 and 5
  4.    1, 3, 4 and 5
 Discuss Question
Answer: Option A. -> 1, 2 and 3
Answer: (a)Corporation Tax, Wealth Tax and Income Tax are in the category of direct tax.
Question 8. A mixed economy refers to an economic system where
  1.    No foreign investment is allowed
  2.    Only the private sector operates under government control
  3.    The economy functions with foreign collaboration
  4.    Both the government and the private sectors operate sectors operate simultaneously
 Discuss Question
Answer: Option D. -> Both the government and the private sectors operate sectors operate simultaneously
Answer: (d)
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies.
The basic idea of the mixed economy is that the means of production are mainly under private ownership; that markets remain the dominant form of economic coordination; and that the government wields indirect influence over the economy through fiscal and monetary policies.
Question 9. Deficit financing is an instrument of
  1.    tax policy
  2.    credit policy
  3.    monetary policy
  4.    fiscal policy
 Discuss Question
Answer: Option D. -> fiscal policy
Answer: (d)
In economics, 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 government taxation and expenditure. Deficit financing is defined as financing the budgetary deficit through public loans and the creation of new money.
Deficit financing in India means the expenditure in excess of current revenue and public borrowing.
Question 10. If a government budgets for a surplus and there is an unexpected increase in the level of economic activity, which of the following is likely to occur?
  1.    There will be an increase in tax revenues and an increase in the budget surplus
  2.    There will be a decrease in tax revenues and a decrease in the budget surplus
  3.    There will be an increase in tax revenues and a decrease in the budget
  4.    There will be a decrease in tax revenues and an increase in the budget surplus
 Discuss Question
Answer: Option A. -> There will be an increase in tax revenues and an increase in the budget surplus
Answer: (a)

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