MCQs
Total Questions : 217
| Page 9 of 22 pages
Answer: Option A. -> debt-GDP ratio declines over time
Answer: (a)
Answer: (a)
Answer: Option B. -> Goods are sold secretly
Answer: (b)
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels:
they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or
they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally.
Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.'
So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
Answer: (b)
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels:
they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or
they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally.
Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.'
So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
Answer: Option B. -> Income tax
Answer: (b)
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as the body of individuals and association of persons) and any other artificial person.
Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. It does not lead to an increase in price as it is dependent on the income of individuals.
Answer: (b)
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as the body of individuals and association of persons) and any other artificial person.
Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. It does not lead to an increase in price as it is dependent on the income of individuals.
Answer: Option A. -> aspects of generation of black money, its transfer abroad and bringing back such money into India’s legitimate financial system
Answer: (a)
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested the enactment of new laws, the strengthening of existing legislation and the introduction of deterrent penalties for tax offences to deal with the menace.
In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent the generation of illicit funds through transactions in property, bullion and equity market.
Besides, the panel, headed by former CBDT Chairman Laxman Das, made a case for strengthening laws relating to investments by FIIs, Participatory Notes (PNs) and routing of funds from Mauritius.
Answer: (a)
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested the enactment of new laws, the strengthening of existing legislation and the introduction of deterrent penalties for tax offences to deal with the menace.
In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent the generation of illicit funds through transactions in property, bullion and equity market.
Besides, the panel, headed by former CBDT Chairman Laxman Das, made a case for strengthening laws relating to investments by FIIs, Participatory Notes (PNs) and routing of funds from Mauritius.
Answer: Option B. -> the extent of inflation in the prices of consumer goods
Answer: (b)
A consumer price index (CPI) measures changes in the price level of consumer goods and services purchased by households. The annual percentage change in a CPI is used as a measure of inflation.
A CPI can be used to index (i.e., adjust for the effect of inflation) the real value of wages, salaries, pensions, for regulating prices and for deflating monetary magnitudes to show changes in real values.
Answer: (b)
A consumer price index (CPI) measures changes in the price level of consumer goods and services purchased by households. The annual percentage change in a CPI is used as a measure of inflation.
A CPI can be used to index (i.e., adjust for the effect of inflation) the real value of wages, salaries, pensions, for regulating prices and for deflating monetary magnitudes to show changes in real values.
Question 86. Which of the following statements is/are correct in terms of Direct and Indirect taxes?
- Excise duty and sales tax are examples of indirect taxes
- Taxes like income tax and property tax are direct taxes
- There is no difference between Direct and Indirect tax
Answer: Option B. -> 1 and 2
Answer: (b)In the case of direct taxes the burden or ‘incidence’ has to be borne by the taxpayers themselves whereas in the case of an indirect tax, the burden can be shifted to another person
Answer: (b)In the case of direct taxes the burden or ‘incidence’ has to be borne by the taxpayers themselves whereas in the case of an indirect tax, the burden can be shifted to another person
Answer: Option C. -> Oniy 1
Answer: (c)
A sinking fund is a fund created by the government and gradually accumulated every year by setting aside a part of current public revenue in such a way that it would be sufficient to pay off the funded debt at the time of maturity.
Under this method, the aggregate burden of public debt is least felt, as the burden of taxing the people to repay the debt is spread evenly over the period of the accumulation of the fund. The preferable alternative for the government is to raise a new loan and credit the proceeds of the sinking fund. It is a separate fund established by a government.
Answer: (c)
A sinking fund is a fund created by the government and gradually accumulated every year by setting aside a part of current public revenue in such a way that it would be sufficient to pay off the funded debt at the time of maturity.
Under this method, the aggregate burden of public debt is least felt, as the burden of taxing the people to repay the debt is spread evenly over the period of the accumulation of the fund. The preferable alternative for the government is to raise a new loan and credit the proceeds of the sinking fund. It is a separate fund established by a government.
Answer: Option B. -> Education, Health and Civil amenities
Answer: (b)
Social infrastructure refers to the facilities and mechanisms that ensure education, health care, community development, income distribution, employment and social welfare.
It includes health care system, including hospitals, the financing of health care, including health insurance, the systems for regulation and testing of medications and medical procedures; the educational and research system, including elementary and secondary schools, universities, specialised colleges, research institutions; Social welfare systems; Sports and recreational infrastructure, such as parks, sports facilities, the system of sports leagues and associations; Cultural infrastructure; and business travel and tourism infrastructure, including both manmade and natural attractions, etc.
Answer: (b)
Social infrastructure refers to the facilities and mechanisms that ensure education, health care, community development, income distribution, employment and social welfare.
It includes health care system, including hospitals, the financing of health care, including health insurance, the systems for regulation and testing of medications and medical procedures; the educational and research system, including elementary and secondary schools, universities, specialised colleges, research institutions; Social welfare systems; Sports and recreational infrastructure, such as parks, sports facilities, the system of sports leagues and associations; Cultural infrastructure; and business travel and tourism infrastructure, including both manmade and natural attractions, etc.
Answer: Option A. -> 1 only
Answer: (a)Fiscal policy is expressed by the budget
Answer: (a)Fiscal policy is expressed by the budget
Answer: Option B. -> Non-monetary gold movements
Answer: (b)
Balance of payments (BoP) accounts is an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country’s exports and imports of goods, services, financial capital, and financial transfers. The two principal parts of the BOP accounts are the current account and the capital account.
The current account shows the net amount a country is earning if it is in surplus, or spending if it is in deficit. It is the sum of the balance of trade (net earnings on exports minus payments for imports), factor income (earnings on foreign investments minus payments made to foreign investors) and cash transfers.
Some of the components of the current account of BOP include investment income; borrowing entities in respect of their external commercial borrowing; secondary income account (transfer payments); primary income account (factor income such as from loans and investments), etc.
Answer: (b)
Balance of payments (BoP) accounts is an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country’s exports and imports of goods, services, financial capital, and financial transfers. The two principal parts of the BOP accounts are the current account and the capital account.
The current account shows the net amount a country is earning if it is in surplus, or spending if it is in deficit. It is the sum of the balance of trade (net earnings on exports minus payments for imports), factor income (earnings on foreign investments minus payments made to foreign investors) and cash transfers.
Some of the components of the current account of BOP include investment income; borrowing entities in respect of their external commercial borrowing; secondary income account (transfer payments); primary income account (factor income such as from loans and investments), etc.
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