The Government: Budget and the Economy Test

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The Government: Budget and the Economy Test - 14

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Weekly Quiz Competition

Question 1
1 / -0

Borrowing from all the sides like net borrowing from RBI and from abroad gives _______.

A
fiscal deficit

B
budget deficit

C
primary deficit

D
revenue deficit

Solution

The budget deficit is the difference between current government's spending on goods and services and total current revenue from all types of taxes net of transfer payments. So when borrowing is done from RBI or other sources, that creates the budget deficit.
Question 2
1 / -0

What are the features of Fiscal Responsibility and Budget Management Act, (FRBMA) 2003?

A
To reduce fiscal deficit to not more than 3 percent of GDP

B
To ensure greater transparency in fiscal operations.

C
To eliminate the revenue deficit by March 31, 2009

D
All the above

Solution

The FRBMA is an act which institutionalizes and regulates financial discipline and help manage public funds in order to strengthen India's fiscal position. The purpose of FRBMA was to reduce fiscal deficit.
Question 3
1 / -0

Budgetary control system acts as a friend, philosopher and guide to the _________.

A
management

B
share holders

C
creditors

D
employees

Solution

A budget is a detailed plain of operations for some specific future period. It is an estimate prepared in advance of the period to which it applies. It acts as a business barometer as it is complete programmed of activities of the business for the period covered
Besides' budgetary control' refers to a system of management and accounting control by which all operations and output are forecast as far as ahead as possible and the actual results, when known are compared with the budget estimates. Thus the term budgetary control is designed to evaluate the performance in terms of goals budgeted.
Question 4
1 / -0

The difference between total expenditure and total receipts except loans and other liabilities is called _______.

A
fiscal deficit

B
budget deficit

C
primary deficit

D
revenue deficit

Solution

The fiscal deficit is the primary deficit plus interest payments on the debt. Therefore, if refers to the difference in total expenditure and total receipts without loan and other liability.
Question 5
1 / -0

Budgetary control helps the management in __________.

A
Obtaining bank credit

B
Issue of shares

C
Getting grants from government

D
All of these

Solution

Budgetary control is the process of determining various actual results with budgeted figures for the enterprise for the future period and standards set then comparing the budgeted figures with the actual performance for calculating variances if any.
A budget is a means and budgetary control is the end result. The budgetary control system enables the management to conduct business in the most efficient manner.
Budgeting also aids in obtaining bank credit, as the main work of banks is to provide funds for business projects.
Question 6
1 / -0

If in a budget the government's revenue receipts and non-debt capital revenue are less than the government's total expenditure, it is called _____.

A
budget deficit

B
revenue deficit

C
fiscal deficit

D
primary deficit

Solution

A fiscal deficit occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings. Deficit differs from debt, which is an accumulation of yearly deficits.
Question 7
1 / -0

Which of the following Acts help(s) Union Govt to control its fiscal deficit?

A
Finance Act

B
Fiscal Responsibility and Budget Management Act

C
Banking Companies Act

D
Both (a) and (b)

Solution

The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 has been designed by the government to manage financial discipline, reduce fiscal deficit, improve macroeconomic management and improve public funds by having a balanced budget.
Question 8
1 / -0

Budget period is the __________.

A
Period of budget committee

B
Period of budget centers

C
Period for which a budget is prepared

D
Period of budget officer
Question 9
1 / -0

Which of the following is not a State tax?

A
Profession Tax

B
Sales Tax

C
Land Tax

D
Wealth Tax

Solution

Wealth tax is a tax based on the market value of the assets owned. It is also called as capital tax or equity tax.
State tax is the one which is imposed on the taxable income of individuals, corporations, certain estates and trusts. Hence, wealth tax is not a state tax.
Question 10
1 / -0

Which of the following is not true about 'vote on-account'?

A
It is a budget presented in the Parliament to cover the deficit left by the last budget.

B
It does not allow the Government to set for the economic policies of the new plan which starts from April 1.

C
It prevents the Government from imposing fresh taxes or withdrawing old one.

D
This allows the Government to withdraw an amount for a period with the consent of Parliament.

Solution

A government budget is a financial statement presenting the government's proposed revenues and spending for a financial year. The government budget balance, also alternatively referred to as general government balance, public budget balance, or public fiscal balance, is the overall difference between government revenues and spending.
A positive balance is called a government budget surplus, and a negative balance is a government budget deficit.
A budget is prepared for each level of government (from national to local) and takes into account public social security obligations.

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Re-Attempt Weekly Quiz Competition

The Government: Budget and the Economy Test - 14

Result

The Government: Budget and the Economy Test - 14

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Rank

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SHARING IS CARING

Question 1

fiscal deficit

budget deficit

primary deficit

revenue deficit

Solution

Question 2

To reduce fiscal deficit to not more than 3 percent of GDP

To ensure greater transparency in fiscal operations.

To eliminate the revenue deficit by March 31, 2009

All the above

Solution

Question 3

management

share holders

creditors

employees

Solution

Question 4

fiscal deficit

budget deficit

primary deficit

revenue deficit

Solution

Question 5

Obtaining bank credit

Issue of shares

Getting grants from government

All of these

Solution

Question 6

budget deficit

revenue deficit

fiscal deficit

primary deficit

Solution

Question 7

Finance Act

Fiscal Responsibility and Budget Management Act

Banking Companies Act

Both (a) and (b)

Solution

Question 8

Period of budget committee

Period of budget centers

Period for which a budget is prepared

Period of budget officer

Question 9

Profession Tax

Sales Tax

Land Tax

Wealth Tax

Solution

Question 10

It is a budget presented in the Parliament to cover the deficit left by the last budget.

It does not allow the Government to set for the economic policies of the new plan which starts from April 1.

It prevents the Government from imposing fresh taxes or withdrawing old one.

This allows the Government to withdraw an amount for a period with the consent of Parliament.

Solution

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