The Government: Budget and the Economy Test

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The Government: Budget and the Economy Test - 29

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Weekly Quiz Competition

Question 1
1 / -0

In CSGL Account, ''S'' Stands for..........

A
Subsidiary

B
Securities

C
Scheduled

D
Stock
Question 2
1 / -0

Select the major reasons for price rise in most of the developing economies from the list given below:
1. Follow-up to the policy of deficit financing together with the burden of carrying huge non-developmental expenditures
2. Printing of fresh currencies to meet their expenditures
3. Levels of aggregate production lagging behind the levels of simultaneous aggregate demand.

A
Only $$1$$

B
$$1$$ and $$2$$

C
Only $$3$$

D
$$1, 2$$ and $$3$$

Solution

All are the reasons for price rises in these economies, including India.
Question 3
1 / -0

Select the incorrect statements about 'capital consumption' from the given choices, using the code given below:
1. The situation when due to the losses of a company in consecutive years make it obliged to pay its current expanses using its capital base.
2. A situation when the listed firms under report their losses so that they can take higher benefits of depreciation.
3. The process by which a company shows higher loss in its operation to withholds payments of dividends to its various share holders.

A
1 and 2

B
2 and 3

C
1 and 3

D
1,2 and 3

Solution

Capital consumption is the other term for 'depreciation'. In the process of their uses fixed assets depreciated (go for wear and tear) at the rate decided by the government of the economy- the rates for the same assets may vary across the economies.
Question 4
1 / -0

Which of the following is/ are included in the capital budget of the Government of India?
1. Expenditure on acquisition of assets like roads, buildings, machinery, etc.
2. Loans received from foreign governments
3. Loans and advances granted to the States and Union Territories
Select the correct answer using the code given below.

A
$$1$$ only

B
$$2$$ and $$3$$ only

C
$$1$$ and $$3$$ only

D
$$1, 2$$ and $$3$$
Question 5
1 / -0

As per the provisions of the FRBM Act. along with the Budget and Demands for Grants the Gol needs to lay which of the following statements before the Parliament in each financial year. select the correct answer using the code given below:
1. Fiscal Policy Strategy Statement IFPSS)
2. Medium Term Fiscal Policy Statement I MTFPS)
3. Macroeconomic Framework Statement (MFS)

A
1 and 2

B
2 and 3

C
1,2 and 3

D
None of the above

Solution

All the three statements the Gol brings before the Parliament side by side the Union Budget.
Question 6
1 / -0

Which of the following is correct about the 'committed expenditures' of the government?
1. Expenditures on interest payment due to internal and external borrowings.
2. Expense in the name of the 'charged expenditure'.
3. Expenditures due to pensions and provident fund liabilities.

A
Only 1

B
Only 2

C
1 and 3

D
1, 2 and 3

Solution

Changed expenditures are not counted in the committed expenditure of the government.
Question 7
1 / -0

Which of the following is/are correct about India's 'primary deficit'?
1. This is the fiscal deficit after deducting the cost of interest payment.
2. Falling fiscal deficit and rising primary deficit is considered good.
3. Interest payment constitutes around 82 per cent of India's fiscal deficit.

A
Only 1

B
Only 2

C
1 and 2

D
1,2 and 3

Solution

India's fiscal deficit for 2016-2017 was 3.5 per cent while the primary deficit was 0.3 per cent. It means, the cost of interest payment was 3.2 per cent (Union Budget 2017-18).
Question 8
1 / -0

Select the most popular and prevalent combination of taxation and expenditure by governments across the world today.

A
Progressive Taxation with Regressive Expenditure

B
Proportional Taxation with Proportional Expenditure

C
Progressive Taxation with Progressive Expenditure

D
Regressive Taxation with Regressive Expenditure

Solution

Progressive taxation though disincentivizes production and encourages evasion, is the most popular mode of taxation as it puts higher tax burden on the richer people and lower taxes on the less rich. Similarly, by following 'progressive expenditure', the governments of the modern world cancel out the blame on them of being 'non-progressive'.
Question 9
1 / -0

Select the incorrect statement/ statements about the fiscal policy of the modern economies using the code given below:
1. As development comes in, there are lesser challenges on the expenditure front for the governments.
2. More development means more government expenditure.
3. Governments in the developed countries have been able to limit their expenditures due to higher levels of development.

A
$$1$$ and $$2$$

B
Only $$2$$

C
$$1$$ and $$3$$

D
Only $$3$$
Question 10
1 / -0

Which of the following action/actions can be taken by the government to reduce the persistent challenge of budget deficit?
1. Reducing the duties on imports
2. Rationalising subsidies
3. Cutting the expenditure of revenue
4. Merging the existing welfare schemes

A
Only1

B
1 and 2

C
2 and 4

D
2.3 and 4

Solution

By reducing import duties government revenue receipts will come down. On the other hand only merging welfare schemes will not give guarantee of expenditures on this count.

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Re-Attempt Weekly Quiz Competition

The Government: Budget and the Economy Test - 29

Result

The Government: Budget and the Economy Test - 29

Score

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Rank

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SHARING IS CARING

Question 1

Subsidiary

Securities

Scheduled

Stock

Question 2

Only $$1$$

$$1$$ and $$2$$

Only $$3$$

$$1, 2$$ and $$3$$

Solution

Question 3

1 and 2

2 and 3

1 and 3

1,2 and 3

Solution

Question 4

$$1$$ only

$$2$$ and $$3$$ only

$$1$$ and $$3$$ only

$$1, 2$$ and $$3$$

Question 5

1 and 2

2 and 3

1,2 and 3

None of the above

Solution

Question 6

Only 1

Only 2

1 and 3

1, 2 and 3

Solution

Question 7

Only 1

Only 2

1 and 2

1,2 and 3

Solution

Question 8

Progressive Taxation with Regressive Expenditure

Proportional Taxation with Proportional Expenditure

Progressive Taxation with Progressive Expenditure

Regressive Taxation with Regressive Expenditure

Solution

Question 9

$$1$$ and $$2$$

Only $$2$$

$$1$$ and $$3$$

Only $$3$$

Question 10

Only1

1 and 2

2 and 4

2.3 and 4

Solution

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