Government Budget – Test 9 Welcome to Government Budget - Test 9 Q 1. According to a headline in a leading newspaper, "Higher taxes on ultra rich to impact luxury home sales". Which objective of the Government is highlighted in the statement? a) Reallocation of resources b) Economic stability c) Redistribution of income and wealth d) Economic growth Q 2. Taxation leads to: a) Increase in the personal disposable income b) Decrease in the personal disposable income c) Increase in the Government spending d) Decrease in the Government spending Q3. Which of the following statements is not true? a) FD = Budgetary deficit + Borrowings and other liabilities b) Fiscal deficit is not always inflationary c) Fiscal deficit is equal to the borrowing requirements by the Government d) FD = TE - TR Q 4. Which of the following is not a non-tax source of revenue? a) Penalty b) Dividends c) Import duty d) Grants in aid Q 5. In case of a _______________ tax, impact and incidence of taxation lies on different persons. Q 6. Which of the following is a capital expenditure? a) Salaries paid to army officers b) Loans to other State Governments c) Pension paid to retired employees d) Interest paid on national debt Q 7. In which year was the first ever budget presented in India? a) 1857 b) 1942 c) 1860 d) 1947 Q 8. Printing of currency by the commercial banks to meet the budgetary deficit is known as deficit financing. a) True b) False Q 9. By aiming at "Inclusive Growth Strategy", which objective is the Government trying to achieve? Q 10. What will be the effect of a surplus budget on the level of aggregate demand in the economy? a) Positive b) Negative c) No effect d) None of the above Q 11. A large fiscal deficit leads to a higher revenue deficit in the future. a) True b) False Q 12. Which of the following is a combination of direct taxes? a) Excise duty and wealth tax b) Service tax and income tax c) Corporation tax and personal tax d) Service tax and custom duty Q 13. If interest payments are ₹ 100 cr and primary deficit is ₹ 50 cr, what will be the value of borrowings? a) ₹ 100 cr b) ₹ 150 cr c) ₹ 50 cr d) None of the above Q 14. Which of the following statements is incorrect? a) Revenue receipts are regular in nature b) There is no future obligation to return the amount received as revenue receipts c) Capital receipts either lead to the creation of assets or a reduction in the liability d) Loans recovered are treated as capital receipts as they reduce the assets of the Government Q 15. The_______________ includes only such transactions that affect the current income and expenditure of the Government. a) Revenue Deficit b) Fiscal Deficit c) Primary deficit d) None of the above Q 16. Which of the following is not true for fiscal deficit? a) FD = Total expenditure - Revenue receipts - Non-debt creating capital receipts b) FD = Net borrowings at home + Borrowings from RBI + Borrowings from abroad c) FD = Primary deficit + Interest payments on accumulated debt d) None of the above Q 17. _______________ is a receipt of the Government by imposing penalty on individuals for not obeying court orders and breaching of contracts. Q 18. Primary deficit is the borrowing requirements of the Government for making: a) Interest payments b) Other than interest payments c) Payments of public debts d) Payments of borrowings from RBI Q 19. Government budget is a: a) Stock variable b) Flow variable c) Both stock and flow variable d) Neither stock nor flow variable Q 20. Receipts of Post-office Savings Accounts, National Savings Certificates, etc. are examples of capital receipts. a) True b) False Time's up
