Economics Test

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Economics Test - 25

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Weekly Quiz Competition

Question 1
5 / -1

Choose the incorrect statement from given below

A
Government budget is an annual statement of income and expenditure of government for current fiscal year.

B
Budget is prepared by all levels of government.

C
Government, through its budget tries to minimise income inequalities

D
Fiscal policy of government includes tax and expenditure policy of the government.

Solution

Government budget is prepared for upcoming fiscal year.
Question 2
5 / -1

Dis-investment by the government refers to

A
selling of fixed capital assets by government

B
selling of share of PSUs

C
selling of plants of government

D
selling of buildingsand shares of governmnt

Solution

Dis -investment is the process of selling a portion of government holdings in the PSUs.
Question 3
5 / -1

Identify revenue expenditure from the given below

A
Purchase of shares of PSUs

B
Loan and advancement

C
Subsidies given to the public

D
Expenditure on acquisition of land

Solution

Subsidies given by the government is a revenue expenditure as it neither reduce liability nor increase assets.
Question 4
5 / -1

_______ deficit includes interest payment by the government on the past loans.

A
Revenue

B
Capital

C
Both (a) and (b)

D
Neither (a) nor (b)

Solution

It is an example of revenue deficit as it do not reduce liabilities.
Question 5
5 / -1

Primary deficit in a government budget will b e zero, when _______

A
revenue deficit is zero

B
net interest payments are zero

C
fiscal deficit is zero

D
fiscal deficit is egual to interest payment

Solution

Primary deficit is the difference between fiscal deficit and interest payments. Primary deficit is zero when these two are equal.
Question 6
5 / -1

Budget deficit is equal to total expenditure minus total receipts.

A
True

B
Partially true

C
False

D
Can't say

Solution

Fiscal deficit and budget deficit are different. Fiscal deficit excludes borrowing while budget deficit includes borrowings.
Question 7
5 / -1

Which of the following measures of meeting deficit in budget, leads to an increase in money supply in the economy?

A
Dis-investment

B
Loan from World Bank

C
All of the above

D
Deficit financing

Solution

In an economy, deficit financing leads to an increase in the money supply
Question 8
5 / -1

Choose the correct option from given below

A
Non-tax revenues of the government are non-recurring in nature.

B
Borrowings from rest of the world are revenue receipts.

C
During inflationary gap, government prepares deficit budget.

D
Recovery of loans from rest of the world is revenue receipt.

Solution

During inflationary gap there is excess demand in the economy. So, a deficit budget is prepared.
Question 9
5 / -1

If borrowings and other liabilities are reduced to the budget deficit, we get

A
fiscal deficit

B
primary deficit

C
capital deficit

D
revenue deficit

Solution

Fiscal deficit is exclusive of borrowings or current financial year.
Question 10
5 / -1

If primary deficit is ₹ 3,000 and interest payment is ₹ 500, the fiscal deficit is

A
₹ 3,500

B
₹ 4,000

C
₹ 4,100

D
₹ 4,200

Solution

Primary Deficit = Fiscal Deficit - Interest Payment

3,000 = Fiscal Deficit - 500

Fiscal Deficit = 3,000 + 500 = ₹ 3,500

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Economics Test - 25

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Economics Test - 25

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SHARING IS CARING

Question 1

Government budget is an annual statement of income and expenditure of government for current fiscal year.

Budget is prepared by all levels of government.

Government, through its budget tries to minimise income inequalities

Fiscal policy of government includes tax and expenditure policy of the government.

Solution

Question 2

selling of fixed capital assets by government

selling of share of PSUs

selling of plants of government

selling of buildingsand shares of governmnt

Solution

Question 3

Purchase of shares of PSUs

Loan and advancement

Subsidies given to the public

Expenditure on acquisition of land

Solution

Question 4

Revenue

Capital

Both (a) and (b)

Neither (a) nor (b)

Solution

Question 5

revenue deficit is zero

net interest payments are zero

fiscal deficit is zero

fiscal deficit is egual to interest payment

Solution

Question 6

True

Partially true

False

Can't say

Solution

Question 7

Dis-investment

Loan from World Bank

All of the above

Deficit financing

Solution

Question 8

Non-tax revenues of the government are non-recurring in nature.

Borrowings from rest of the world are revenue receipts.

During inflationary gap, government prepares deficit budget.

Recovery of loans from rest of the world is revenue receipt.

Solution

Question 9

fiscal deficit

primary deficit

capital deficit

revenue deficit

Solution

Question 10

₹ 3,500

₹ 4,000

₹ 4,100

₹ 4,200

Solution

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