1. Which one of the following forms the largest share of deficit of Government of India Budget?
A. Primary deficit
B. Fiscal deficit
C. Budgetary deficit
D. Revenue deficit
ANSWER:B.Fiscal deficit
SOLUTION :Fiscal deficit receives prominent place in the government of India’s budget.
2. Fiscal Policy is connected with __________.
A. Policy of agriculture
B. Public revenue & expenditure
C. Policy of population
D. Policy of industry
ANSWER:B.Public revenue & expenditure
SOLUTION:
Fiscal policy is related with public revenue and public expenditure.
3. If Fiscal Policy is trying to promote stability and economic growth through tax cuts, what type of policy is Fiscal policy using?
A. Tight Money Policy
B. Ease Money Policy
C. Expansionary Fiscal Policy
D. Restrictive Fiscal Policy
ANSWER :C.Expansionary Fiscal Policy
SOLUTION:
When a government uses tax cuts to promote economic growth and stability, it’s using an expansionary fiscal policy.
4. Which of the following method is not used in determining National Income of a country?
A. Income Method
B. Investment Method
C. Output Method
D. Input Method
ANSWER: B.Investment Method
SOLUTION:
Profit Method is not a method of measuring national income. Product Method, Income Method, Expenditure Method are methods of measuring national income. In product method, national income is measured as a flow of goods and services.
5. Most economists believe that the immediate determinant of output and employment is _____________.
A. A decline in the Dow Jones Industrial Average
B. An increase in the costs of production
C. A change in total spending
D. The development of new technology
ANSWER: C.A change in total spending
SOLUTION:
Many economists believe that a change in total spending is the immediate determinant of domestic output and employment.
6. Inflation imposes the greatest burdens on ____________.
A. Lenders, when it is unanticipated
B. Borrowers, when it is unanticipated
C. Borrowers, when it is anticipated
D. Lenders, when it is anticipated
ANSWER:A.Lenders, when it is unanticipated
SOLUTION:
Lenders, when it is unanticipated
7. With reference to deficit financing, monetized deficit is the part that is financed through ____________.
A. Borrowings from private sector
B. Borrowings from public sector scheduled commercial banks
C. Borrowings from RBI
D. External commercial borrowings
ANSWER: C.Borrowings from RBI
SOLUTION :
Monetized Deficit refers to the practice of financing a government’s budget deficit by borrowing directly from the central bank, in this case, the Reserve Bank of India (RBI), through the creation of new money or by printing additional currency.
8. Which Bill is concerned with the tax proposals of the Budget?
A. State Bill
B. Cash Bill
C. Finance Bill
D. None of these
ANSWER:C.Finance Bill
SOLUTION:
Finance Bill contains provisions related to tax proposals and revenue received or expenditures made from the Consolidated Fund of India as well as some other financial matters.
9. If we include it, national income will be over-estimated __________.
A. Income from abroad
B. Transfer payment
C. Exports
D. Illegal income
ANSWER: B.Transfer payment
SOLUTION:
Transfer payment.
10. National Income in India is compiled by __________.
A. Finance Commission
B. Central Statistical Organization
C. Indian Statistical Institute
D. NDC
ANSWER: B.Central Statistical Organization
SOLUTION:
In India the estimates of national income are prepared by central statistical organization (C.S.O).