The Government: Budget and the Economy Test

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The Government: Budget and the Economy Test - 28

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Weekly Quiz Competition

Question 1
1 / -0

Which among the following is a component of revenue expenditure of the government?

A
Expenditure on general services

B
Expenditure on economic services

C
Grants

D
All of the above

Solution

Revenue expenditure are all such types of government expenditure that does not create any assets for the government or does not cause any reduction in the liability of the government. These expenditures are mainly conducted to provide smooth functioning of government activities and related services. These expenditure includes expenditure on general services, economic services and grants provided to states or member countries.
Question 2
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Expenditure incurred by the government for the provision of essential services like judiciary, defence, and administration is termed as ____________.

A
plan expenditure

B
non-development expenditure

C
non-plan expenditure

D
development expenditure

Solution

The government expenditures incurred on activities that are directly related to or results in some economic and social development of the country such as infrastructural improvement are called developmental expenditures.
Question 3
1 / -0

Government expenditure is a component of the ____________ in the economy

A
aggregate supply

B
aggregate income

C
aggregate demand

D
all of the above

Solution

Government expenditure refers to the expenditure made by the government during the period of an accounting year which forms a part of the aggregate demand in the economy which is incurred either for consumption purpose like judiciary system or investment purpose like infrastructural development.
Question 4
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Union Budget is the budget of _______________.

A
Central Government

B
Local Government

C
State Govemment

D
Election Commission

Solution

Central government makes the union budget. The government frames its budgetary policy with a view to achieve economic stability and growth.
Question 5
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Which one of the following is not an objective of government budget?

A
Reallocation of resources

B
Economic Stability

C
Increasing regional disparities

D
Economic Growth

Solution

The government frames its budgetary policy with an aim of achievng a set objectives. Some of the objectives are:
1)High rate of GDP growth
2)Balanced Regional growth
3)Allocation of resources
4) Redistribution of income and wealth
5) Employment opportunities
6) Economic stability
Therefore, increasing regional disparities is not an objective of government budget.
Question 6
1 / -0

Budget Deficit means__________.

A
Total Expenditure -Total Receipts

B
Capital Expenditure - Capital Receipts

C
Total Expenditure -Total Receipts (excluding borrowings)

D
Total Expenditure - Revenue Receipts

Solution

A budget deficit refers to a situation when the government's total expenditure exceeds the total receipts. Therefore, a budget deficit of the government is estimated by subtracting total receipts from the total expenditure.
Question 7
1 / -0

If estimated government receipts are more than estimated government expenditure, it is said to be a_______.

A
Surplus Budget

B
Deficit Budget

C
Balanced Budget

D
None of these

Solution

Surplus budget refers to a situation when government receipts are more than government expenditure. Government receipts consist of capital receipts and revenue receipts. Whereas, government expenditure consists of capital expenditure and revenue expenditure.
Question 8
1 / -0

Which of the following are the components of a budget?

A
Capital Budget

B
Revenue Budget

C
Both (a) and (b)

D
Neither (a) nor (b)

Solution

Components of the budget refers to the structure of the budget. The budget has two broad components: Revenue budget and Capital budget. Revenue budget includes revenue expenditure and revenue receipts. Capital budget includes capital expenditure and capital receipts.
Question 9
1 / -0

"Policies of surplus budget during inflation" is a part of which objective of government budget?

A
Economic Growth

B
Economic Stability

C
Reducing Regional Disparities

D
Reallocation of Resources

Solution

Economic stability can be achieved by correcting the situations of excess demand and deficient demand. Thus, policies of surplus budget during inflation is a part of the "economic stability" objective of government budget.
Question 10
1 / -0

Disinvestment by government means _________________.

A
Selling of its fixed capital assets

B
Selling of shares of public enterprises held by it

C
Selling of its buildings

D
All the above

Solution

Disinvestment by government refers to the selling of shares of public enterprise to private organization. It is also known as privatization.

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Re-Attempt Weekly Quiz Competition

The Government: Budget and the Economy Test - 28

Result

The Government: Budget and the Economy Test - 28

Score

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Rank

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SHARING IS CARING

Question 1

Expenditure on general services

Expenditure on economic services

Grants

All of the above

Solution

Question 2

plan expenditure

non-development expenditure

non-plan expenditure

development expenditure

Solution

Question 3

aggregate supply

aggregate income

aggregate demand

all of the above

Solution

Question 4

Central Government

Local Government

State Govemment

Election Commission

Solution

Question 5

Reallocation of resources

Economic Stability

Increasing regional disparities

Economic Growth

Solution

Question 6

Total Expenditure -Total Receipts

Capital Expenditure - Capital Receipts

Total Expenditure -Total Receipts (excluding borrowings)

Total Expenditure - Revenue Receipts

Solution

Question 7

Surplus Budget

Deficit Budget

Balanced Budget

None of these

Solution

Question 8

Capital Budget

Revenue Budget

Both (a) and (b)

Neither (a) nor (b)

Solution

Question 9

Economic Growth

Economic Stability

Reducing Regional Disparities

Reallocation of Resources

Solution

Question 10

Selling of its fixed capital assets

Selling of shares of public enterprises held by it

Selling of its buildings

All the above

Solution

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