DOWNLOAD MOBILE APPLICATION TO LEARN MORE: FISCAL POLICY MCQ QUESTIONS
DOWNLOAD MOBILE APPLICATION TO LEARN MORE: FISCAL POLICY MCQ QUESTIONS
DOWNLOAD MOBILE APPLICATION TO LEARN MORE: FISCAL POLICY MCQ QUESTIONS
Fiscal Policy MCQs, Fiscal Policy Objective Questions, Fiscal Policy Question & Answers, Fiscal Policy Practice Papers for all Govt Exam
What is Fiscal Policy? Fiscal Policy deals with the revenue and expenditure policy of the Govt. The word fiscal has been derived from the word ‘fisk’ which means public treasury or Govt funds.
• The Union Budget 2021 has signalled the emphasis on the Development Financial Institutions (DFIs) in the pursuit of long-term infrastructure creation for the revival of the economy.
• The establishment of the Dispute Resolution Committee (DRC) has been proposed in the Union Budget 2021 that can help provide quick relief to taxpayers in tax disputes. •
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•Objectives of Fiscal Policy
• The following are the objectives of the Fiscal Policy:
• Higher Economic Growth
• Price Stability
• Reduction in Inequality
•The above objectives are met in the following ways:
• Consumption Control – This way, the ratio of savings to income is raised.
• Raising the rate of investment.
• Taxation, infrastructure development.
• Imposition of progressive taxes.
• Exemption from the taxes provided to the vulnerable classes.
• Heavy taxation on luxury goods.
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Table of Contents
FISCAL POLICY MCQ QUESTIONS
1. Economic Survey in India is published by the
a) Reserve Bank of India
b) NITI Aayog
c) Ministry of Finance, Government of India
d) Ministry of Industries, Government of India
ANSWER:- C
2. Fiscal policy in India is formulated by
a) Reserve Bank of India
b) Planning Commission
c) Finance Ministry
d) Securities and Exchange Board of India
ANSWER:- C
3. If we deduct grants to states for the creation of capital assets from revenue deficit, we arrive at
a) Primary deficit
b) Net fiscal deficit
c) Budgetary deficit
d) Effective revenue deficit
ANSWER:- D
4. Which one of the following is the largest item of expenditure of the Government of India on revenue account?
a) Defence
b) Subsidies
c) Pensions
d) Interest payments
ANSWER:- D
5. Which one of the following is a capital receipt in government budget?
a) Interest receipts on loans given by the government to other parties
b) Dividends and profits from public sector undertakings
c) Borrowing of the government from public
d) Income tax receipts
ANSWER:- C
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6.Equality in a country can be best brought through
a) Progressive expenditure
b) Regressive taxation
c) Regressive expenditure
d) None of the above
ANSWER:- A
7.Fiscal deficit in the union budget is equal to
a) Net increase in internal and external borrowings
b) The difference between current expenditure and current revenue
c) The sum of monetized deficit and budgetary deficit
d) Net increase in the union government’s borrowing from the Reserve Bank of India
ANSWER:- D
8.Fiscal deficit implies:
a) Total expenditure – (Revenue receipts + Recovery of loans + Receipts from disinvestment)
b) Total expenditure – Total receipts from all sources ,including borrowings
c) Total expenditure – (Revenue receipts + Fresh loans)
d) Total expenditure – Disinvestment receipts
ANSWER:- A
9.Fiscal Responsibility and Budget Management Act (FRBMA) was passed to keep check on
a) Fiscal deficit only
b) Revenue deficit only
c) Both fiscal deficit and revenue deficit
d) Neither fiscal deficit nor revenue deficit
ANSWER:- C
10.According to the provisions of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 and FRBM Rules, 2004, the government is under obligation to present three statements before the Parliament along with the annual budget.
• Which one of the following is not one of them?
a) Macroeconomic framework statement
b) Fiscal policy strategy statement
c) Medium-term fiscal policy statement
d) Short-term fiscal policy statement
ANSWER:- D
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11. Which of the following is not a component of revenue receipts of the union government?
a) Corporate tax receipts
b) Dividends and profits
c) Disinvestment receipts
d) Interest receipts
ANSWER:- C
12. Every year the Economic Survey is compiled by :
a) Office of Economic Advisor
b) Central Statistical Office (CSO)
c) National Sample Survey Organisation (NSSO)
d) Department of Economic Affairs
ANSWER:- B
13.Consider the following statements:
• India spends more than 1% of its GDP on Research and Development (R&D)
• The expenditure on R&D as proportion of GDP has increased in the past few years
• China incurs more than four times expenditure on R&D than that by India
• Which of the statements given above is/are correct
a) 1, 2, and 3
b) 2 and 3 only
c) 1 and 2 only
d) 3 only
ANSWER:- A
14. Which of the following is/are included in the capital budget of the Government of India?
• Expenditure on acquisition of fighter aircraft
• Financial assistance received from the World Bank
• Loans made to foreign governments
• Grants given to states and union territories every year
• Select the correct answer using the codes given below:
a) 1 and 2 only
b) 2 and 3 only
c) 1, 3, and 4
d) 1, 2, and 3
ANSWER:- D
15. Consider the following statements regarding plan and non-plan expenditure
• Plan expenditure is believed to be under the discretion of the central government, whereas non-plan expenditure is not part of discretion of the central government
• The distinction between plan and non-plan expenditures has been eliminated from Budget 2017-18 onwards.
• Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
ANSWER:- C
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16.Which of the following is/are components of public debt?
• Public borrowing
• Treasury bills
• Securities issued by RBI
• Select the correct answer using the codes given below:
a) 1 only
b) 1 and 2
c) 2 only
d) 1,2, and 3
ANSWER:- D
17.With reference to revenue deficit, consider the following statements:
• It includes only those transactions that affect current income and expenditure of government.
• It considers the current borrowing by the government.
• As per the FRBM Act, the government is required to reduce the revenue deficit to 3% of the GDP
• Which of the statements given above is/are correct?
a) 1 only
b) 1 and 2 only
c) 2 and 3 only
d) 1, 2, and 3
ANSWER:- D
18.Budget deficit may lead to
• Rise in the interest rates
• Fall in value of currency
• Increase in currency circulation
• Which of the statements given above is/are correct?
a) 1 and 2 only
b) 1, 2, and 3
c) 1 and 3 only
d) 2 and 3 only
ANSWER:- B
19. Which of the following items are included in revenue receipts?
• Tax revenue
• Non-tax revenue
• Recovery loans
• Borrowing and other liabilities
• Select the correct answer using the codes given below:
a) 1 and 2 only
b) 1, 2 , and 3 only
c) 3 and 4 only
d) 1, 3, and 4 only
ANSWER:-A
20.Which of the following is/are example of capital payment by the government?
• Loan repayment
• Interest payment on loan
• Purchase of defence technology
• Select the correct answer using the codes given below:
a) 1 only
b) 1 and 3 only
c) 2 and 3 only
d) 1, 2 and 3
ANSWER:- B
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