Top 150+ Solved Fiscal System of India MCQ Questions Answer
Q. Deficit financing leads to inflation in general, but it can be checked if:
a. government expenditure leads to increase in aggregate supply in ratio of aggregate demand
b. aggregate demand is increased only
c. all the expenditure is denoted national debt payment only
d. all the above
Q. The budget broadly comprises: (i) revenue budget, and (li) capital budget. Which of thefollowing item or items is/are not covered under the revenue budget? I. Different proceeds of taxes and other duties levied by the government II. Interest and dividend on investments made by the government III. Expenditure on running government and various services IV. Market loans raised by the government
a. III and IV
b. II and III
c. only II
d. only IV
Q. Value-added tax is :
a. an ad valorem tax on domestic final consumption collected at all stages between production and the point of final sale
b. an ad valorem tax on final consumption collected at the manufacturing level
c. tax on final consumption collected at the consumption stage
d. a special tax levised by states on products from other states
Q. What is the main source of revenue to meet different expenditures?
a. Excise duties
b. Customs duties
c. Internal borrowings
d. Income tax
Q. Which one of the following statements regarding the levying, collecting and distribution of Income Tax is correct? [IAS 1999]
a. The Union levies, collects and distributes the proceeds of income tax between itself and the states
b. The Union levies, collects and keeps all the proceeds of income tax to itself
c. The Union levies and collects the tax but all the proceeds are distributed among the states
d. Only the surcharge levied on income tax is shared between the Union and the States
Q. What are “Open Market Operations" ? [SSC Graduate 2003]
a. Activities of SEBI-registered brokers
b. Selling of currency by the RBI
c. Selling of gilt-edged securities by the Government
d. Sale of shares by FIIs
Q. The 'gilt-edged' market deals in : [UP PCS 2002]
a. worn and torn currency notes
b. bullion
c. Govt. securities
d. Corporate bonds
Q. How does the consumer benefit with VAT? [CPO SI 2003]
a. It removes tax on tax and thus reduces price-rise
b. It reduces the cost of production
c. With the abolition of the sales tax
d. Due to the exemption of small Businesses from the tax within certain limits prescribed by the State
Q. Investment in public works is known as :
a. revenue expenditure
b. capital expenditure
c. current expenditure
d. either (a) or (b)
Q. The rising prices in India can be checked through: 1. Budgetary policy 2. Monetary policy 3. Increasing production 4. Increasing income levels Choose your answer from:
a. 1 and 2
b. 1, 2 and 3
c. 1, 2, 3 and 4
d. 2 and 3
Q. A budgetary deficit means:
a. total expenditure is more than total revenue
b. current expenditure is more than current revenue
c. capital expenditure is more than capital revenue
d. total expenditure is more than current revenue
Q. Fiscal deficit in the budget means: [CDS 1999]
a. Revenue deficit plus the net borrowings of the government
b. Budgetary deficit plus the net borrowings of the government
c. Capital deficit plus revenue deficit
d. Primary deficit minus capital deficit
Q. Fiscal deficit in the Union Budget means: [IAS 1994]
a. the difference between current expenditure and current revenue
b. net increase in Union Government's borrowings from the Reserve Bank of India
c. the sum of budgetary deficit and net increase in internal and external borrowings
d. the sum of monetised deficit and budgetary deficit
Q. Among the structural changes which of the following is not wholly welcome?
a. Increase in the share of construction in the GNP
b. Relative contribution of agriculture to our GNP is declining
c. Marked improvement in the contribution of manufacturing to the GNP
d. Substantial increase in the percentage contribution of public administration and defence to GDP