The Government: Budget and the Economy Test

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The Government: Budget and the Economy Test - 30

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Weekly Quiz Competition

Question 1
1 / -0

The policies useful to reduce inequalities of income are the:

A
Budgetary policies

B
Public distribution policies

C
Foreign policies

D
Monetary policies

Solution

Through its budgetary policies, the governemnt tries to reduce the inequalities in income and wealth. They can impose taxes on the rich and give subsidies to the poor so that income is redistributed among the poorer sections of the society.
Question 2
1 / -0

Capital Receipts:

A
Do not create liability for the government

B
Do not create liability for the private sector

C
Create liability for the government

D
Create liability for the private sector

Solution

Any receipt which creates liability for the govt is a capital receipt. For eg. loans/borrowings by the government are a liability as they have to be paid back.
Question 3
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Capital Expenditure:

A
Do not create assets for the government

B
Create assets for the private sector

C
Create assets for the government

D
Do not create assets for the private sector

Solution

Any expenditure by the govt that creates assets for the govt is a capital expenditure For eg. Expenditure on land and building, expenditure on machinery and equipment, purchase of shares etc.
Question 4
1 / -0

The government budget shows the government’s:

A
Actual receipts and expenditure

B
Estimated expenditure only

C
Estimated receipts and expenditure

D
Estimated receipts only

Solution

It is a statement of the estimates of the government receipts and government expenditure during the period of a financial year.
Question 5
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Budgetary policies are implemented by the:

A
Government

B
Finance Ministry

C
Foreign sector

D
Private sector

Solution

The government frames its budgetary policy with a view to achieving a set of objectives.
Question 6
1 / -0

Repayment of loan by the govt.

A
Capital Expenditure

B
Revenue Expenditure

C
Capital Receipts

D
Revenue Receipts

Solution

When the govt repays its loans, it reduces the liability of the govt. So, repayment of loan is a capital expenditure.
Question 7
1 / -0

Another Implication of Fiscal deficit is:

A
it increases financial burden for future generation

B
it maintains financial burden for future generation

C
it does not affect financial burden for future generation.

D
it decreases financial burden for future generation

Solution

Future generations inherit a laggard economy where GDP growth is low because a significant percentage of national income is used to pay the past debts.
Question 8
1 / -0

The major source of Revenue receipts for the government is:

A
Profits

B
Interest

C
Tax Revenue

D
Non Tax Revenue

Solution

Tax receipts is a major revenue for the government. Tax receipts can be income tax, Goods and services tax, gift tax, wealth tax etc. Tax is a compulsory payment to the government by the households, firms or other institutional units.
Question 9
1 / -0

Budgetary policies relate to:

A
Taxes only

B
Direct Taxes

C
Taxes and public expenditures

D
Public expenditures only

Solution

Budgetary policy is an annual exercise relating to the revenue and expenditure policy of the government. The government frames its budgetary policy with a view to achieveing a set of objectives like balanced regional growth, redistribution of income and wealth etc.
Question 10
1 / -0

What does the fiscal deficit relate to under the government budget?

A
Taxes shortfall

B
Disinvestment shortfall

C
Borrowings requirement

D
Disinvestment requirement

Solution

A fiscal deficit represents the overall borrowings required by a government for a fiscal (financial) year.

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Re-Attempt Weekly Quiz Competition

The Government: Budget and the Economy Test - 30

Result

The Government: Budget and the Economy Test - 30

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SHARING IS CARING

Question 1

Budgetary policies

Public distribution policies

Foreign policies

Monetary policies

Solution

Question 2

Do not create liability for the government

Do not create liability for the private sector

Create liability for the government

Create liability for the private sector

Solution

Question 3

Do not create assets for the government

Create assets for the private sector

Create assets for the government

Do not create assets for the private sector

Solution

Question 4

Actual receipts and expenditure

Estimated expenditure only

Estimated receipts and expenditure

Estimated receipts only

Solution

Question 5

Government

Finance Ministry

Foreign sector

Private sector

Solution

Question 6

Capital Expenditure

Revenue Expenditure

Capital Receipts

Revenue Receipts

Solution

Question 7

it increases financial burden for future generation

it maintains financial burden for future generation

it does not affect financial burden for future generation.

it decreases financial burden for future generation

Solution

Question 8

Profits

Interest

Tax Revenue

Non Tax Revenue

Solution

Question 9

Taxes only

Direct Taxes

Taxes and public expenditures

Public expenditures only

Solution

Question 10

Taxes shortfall

Disinvestment shortfall

Borrowings requirement

Disinvestment requirement

Solution

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