Indian Economy Test 46

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Indian Economy Test 46

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Weekly Quiz Competition

Question 1
1 / -0

Consider the following statements:
1. Revenue budget deals with receipts from taxation and non-tax sources and the expenditure met out from these sources.
2. Net recoveries of loans and advances to states are public sector enterprises form the revenue receipts of the government.
Which of the statements given above is/are correct?

A
Only 1

B
Only 2

C
Both 1 and 2

D
Neither I nor 2

Solution

Revenue budget consists of the revenue receipts of the government (tax revenues and other revenues) and the expenditure met from these revenues. Tax revenues comprise proceeds of taxes and other duties levied by the Union. Other revenues are receipts of the government mainly consisting of interest and dividend on investments made by the government, and fees and receipts for other services rendered by the government. Revenue expenditure is expenditure for the normal running of government departments and various. Net recoveries of loans and advances to states are public sector enterprises form a part of Capital receipts in the Capital budget.
Question 2
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 3
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 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

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
Question 9
1 / -0

Consider the following taxes:
1. Sales tax
2. Value-added tax
3. Property tax
Which of the taxes given above are Ad valorem tax/taxes?

A
1 and 2

B
1 and 3

C
2 and 3

D
All of those

Solution

An ad valorem tax (Latin for "according to value") is a tax whose amount is based on the value of a transaction or of property. It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT). An ad valorem tax may also be imposed annually, as in the case of a real or personal property tax, or in connection with another significant event (e.g. inheritance tax, expatriation tax, or tariff).
Question 10
1 / -0

Minimum Alternate Tax (MAT) is imposed by the Indian Government in addition to which one of the following tax?

A
Personal Income tax

B
Corporation tax

C
Service tax

D
Expenditure tax

Solution

Minimum Alternate Tax (MAT) is a tax effectively introduced in India by the Finance Act of 1987, vide Section 115J of the Income Tax Act, 1961 (IT Act), to facilitate the taxation of ‘zero tax companies’ i.e., those companies which show zero or negligible income to avoid tax. Under MAT, such companies are made liable to pay to the government, by deeming a certain percentage of their book profit as taxable income.

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Re-Attempt Weekly Quiz Competition

Indian Economy Test 46

Result

Indian Economy Test 46

Score

-

Rank

-

SHARING IS CARING

Question 1

Only 1

Only 2

Both 1 and 2

Neither I nor 2

Solution

Question 2

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Solution

Question 3

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 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

Only 1

Only 2

Both 1 and 2

None of them

Question 9

1 and 2

1 and 3

2 and 3

All of those

Solution

Question 10

Personal Income tax

Corporation tax

Service tax

Expenditure tax

Solution

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