Indian Economy Test 46

Result

Indian Economy Test 46

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SHARING IS CARING

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Weekly Quiz Competition

Question 1
1 / -0

Consider the following statements:
1. The proceed of personal income tax is shared between the Central and State Governments.
2. The proceeds of the central excise duty is not shared between the Central and State Governments.
Which of the statements given above is/are correct?

A
Only 1

B
Only 2

C
Both 1 and 2

D
Neither 1 nor 2

Solution

Taxes on income (other than agricultural income and corporation tax) shall be levied and collected by the centre but compulsorily distributed between the centre and the states in such manner as prescribed by the president on the recommendations of the Finance Commission. The obligatory sharing of income tax is provided by Article 270 of the Constitution. As per Article 272 of the Constitution, the Central Excise duty other than on medicinal and toilet preparations shall be levied and collected by the centre but the Parliament by law can divide it between states and centre.
Question 2
1 / -0

Fiscal deficit in the budget means __________.

A
revenue deficit plus the net borrowings of the governments

B
budgetary deficit plus the net borrowings of the government

C
capital deficit plus revenue deficit

D
primary deficit minus Capital deficit

Solution

Budget deficit is the difference between total receipts and total expenditure. If borrowings and other liabilities are added to budget deficit, we get Fiscal deficits.
Question 3
1 / -0

Which one of the following acts is going to be replaced by the Direct Taxes Code (DTC) in India?

A
Income Tax Act 1961

B
Wealth Tax Act 1957

C
Custom Duty Act 1966

D
Both 'a' and 'b'

Solution

DTC will revise, consolidate and simplify the structure of direct tax laws in India into a single legislation. The DTC, when implemented will replace the Income-tax Act, 1961 (ITA), and other direct tax legislations like the Wealth Tax Act, 1957. The Direct Taxes Code (DTC) Bill was introduced in Parliament in 2010 but lapsed with the dissolution of the 15th Lok Sabha. Recently new task force was setup to re-draft the Direct Taxes Code.
Question 4
1 / -0

Value-added tax is ___________.

A
an ad valorem tax on domestic final consumption collected at all stages between production and 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 levied by the states on products from other states

Solution

A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at the point of retail sale. In other words, its is an ad valorem tax on domestic final consumption collected at all stages between production and point of final sale.
Question 5
1 / -0

The income elasticity of demand for inferior goods is

A
less than one

B
less than zero

C
equal to one

D
greater than one
Question 6
1 / -0

Consider the following statements
1. In Indian economy, the employment generated by the private sector is more than that of the public sector.
2. In Indian economy, the growth rate of public sector in the industrial areas like heavy and basic industries, machine goods sector etc is more than that of the private sector.
Which of the statements given above is/are correct?

A
Only 1

B
Only 2

C
Both 1 and 2

D
Neither 1 nor 2

Question 7

1 / -0

Match List I with List II and select the correct answer using the codes given below the lists:

List I	List II
A. Income Tax	1. Levied and collected by the Central Government
B. Corporation	2. Levied and collected by the Central Government and shared by the State Government
C. Professional Tax	3. Levied by the Tax Central Government but collected and appropriated by the State Government
D. Stamp Duties	4. Levied, collected and retained by the State Government.

A-2 B-4 C-3 D-1

A-2 B-3 C-4 D-1

A-2 B-1 C-4 D-3

A-4 B-1 C-3 D-2

Solution

A. Income Tax - Levied and Tax collected by the Central Government and shared between the Centre and the State Government.

B. Corporation - Levied and collected and retained by the Central Government.

C. Professional Tax - Levied and collected and retained by the State Government.

D. Stamp Duties - Levied by the Tax Central Government but collected and appropriated by the State Government.

Question 8
1 / -0

Which of the following statements appropriately describes the 'fiscal stimullus'?

A
It is a massive investment by the government in manufacturing sector to ensure the supply of goods to meet the demand surge by rapid economic growth.

B
It is an intense affirmative action of the government to boost economic activity in the country.

C
It is the government intensive action of financial institutions to ensure disburement of loans to agriculture and allied sector to promote greater food production and contain food inflation.

D
None of the above

Solution

An increase in public spending or a reduction in the level of taxation that might be performed by a government in order to encourage and support economic growth is called as fiscal stimulus. Thus only option A matches this description.
Question 9
1 / -0

In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years?

A
Service tax

B
Personal income tax

C
Excise duty

D
Corporation tax

Solution

The excise duty's share in the total tax revenue which was 41.3% in 1991-92, declined to 25.1% in 2006-07 It is the most that has declined in the last 5 years. Corporation tax has maximum share followed by income tax. Service tax was introduced very late so it’s share would obviously increase.
Question 10
1 / -0

Consider the following statements
1. Disinvestment is using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units rather than receiving the distributions in cash.
2. Disinvestment refers to selling of equity of a Public Sector Undertaking (PSU) to a private organisation or to general public.
Which of the above statements is/are correct?

A
Only 1

B
Only 2

C
Both 1 and 2

D
None of them

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Re-Attempt Weekly Quiz Competition

Indian Economy Test 46

Result

Indian Economy Test 46

Score

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Rank

-

SHARING IS CARING

Question 1

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Solution

Question 2

revenue deficit plus the net borrowings of the governments

budgetary deficit plus the net borrowings of the government

capital deficit plus revenue deficit

primary deficit minus Capital deficit

Solution

Question 3

Income Tax Act 1961

Wealth Tax Act 1957

Custom Duty Act 1966

Both 'a' and 'b'

Solution

Question 4

an ad valorem tax on domestic final consumption collected at all stages between production and point of final sale

an ad valorem tax on final consumption collected at the manufacturing level

tax on final consumption collected at the consumption stage

a special tax levied by the states on products from other states

Solution

Question 5

less than one

less than zero

equal to one

greater than one

Question 6

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Question 7

A-2 B-4 C-3 D-1

A-2 B-3 C-4 D-1

A-2 B-1 C-4 D-3

A-4 B-1 C-3 D-2

Solution

Question 8

It is a massive investment by the government in manufacturing sector to ensure the supply of goods to meet the demand surge by rapid economic growth.

It is an intense affirmative action of the government to boost economic activity in the country.

It is the government intensive action of financial institutions to ensure disburement of loans to agriculture and allied sector to promote greater food production and contain food inflation.

None of the above

Solution

Question 9

Service tax

Personal income tax

Excise duty

Corporation tax

Solution

Question 10

Only 1

Only 2

Both 1 and 2

None of them

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