Government Budget Welcome to your Government Budget - Test 8 Q1. According to a headline, "Government to go ahead with AI disinvestment". Identify the nature of the statement given in the headline. a) Revenue receipt b) Revenue expenditure c) Capital receipt d) Capital expenditure Q2. _______________ means that the public goods are financed in the budget and can be used without any direct payment. Q3. Which of the following is a capital receipt in the context of Government Budget? a) Interest b) External grants c) Provident funds d) Personal tax Q4. Defence services expenditure is a capital expenditure. True or false? a) True b) False Q5. _______________ are those receipts that do not lead to a claim on the Government and are non-redeemable. Q6. Identify the tax whose burden cannot be shifted. a) GST b) Corporation tax c) VAT d) Sales tax Q7. Which of the following is a combination of capital expenditure? a) Grants and interest payments b) Subsidies and construction of roads c) Construction of roads and repayment of loans d) Expenditure on law & order and construction of school buildings Q8. Financial help from a multi-national corporation for victims in a flood affected area is a capital receipt. True or false? a) True b) False Q9. Primary deficit will be equal to zero when: a) Revenue deficit is zero b) Fiscal deficit is zero c) Net interest payments is zero d) Total borrowings is equal to the interest payments Q10. In an economy, if the estimated budget receipts are more than the estimated budget expenditure, the budget would be referred to as a _______________ budget. Q11. If the Government needs to incur higher expenditure, it will have to increase the taxes in order to keep the budget balanced. a) True b) False Q12. A large share of _______________ in the fiscal deficit indicates that a large part of the borrowings is being used to meet the Government's consumption expenditure rather than investment. a) Revenue deficit b) Capital deficit c) Both revenue and capital deficit d) None of the above Q13. Which of the following statements is true? a) Loans from IMF is a revenue expenditure b) Higher revenue deficit necessarily leads to fiscal deficit c) Revenue deficit is the excess of revenue receipts over revenue payments d) Borrowings by the Government represents a situation of fiscal deficit Q14. Which of the following is not true for revenue deficit? A revenue deficit: a) Implies that the Government is dissaving and is using up the savings of other sectors b) Focuses on current fiscal imbalances c) Builds up a stock of debt and interest liabilities and forces the Government to cut down its productive expenditures d) Means that the Government will have to borrow not only to finance its investment but also its consumption expenditure Q15. _______________ is a revenue receipt of the Government, when the owner of the property dies without leaving behind a will or a legal heir. Q16. _______________ is a key variable in judging the financial health of the public sector and stability of the economy. a) Revenue deficit b) Fiscal deficit c) Primary deficit d) None of the above Q17. The revenue and expenditure policy of the Government is often referred to as _______________ Q18. When goods are directly produced by the Government, they are known as: a) Public goods b) Private goods c) Both public and private goods d) Neither public nor private goods Q19. Indirect taxes are _______________ in nature. a) Progressive b) Regressive c) Proportional d) None of the above Q20. In a situation of economic instability, the Government should adopt: a) Surplus Budget b) Deficit Budget c) Both (a) and (b) d) None of the above Time's up
