Tag: public finance, taxes and budget

Questions Related to public finance, taxes and budget

Public expenditure helps to reduce income inequality.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. True

  2. False

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Correct Option: A

Public expenditure incurred on law and order creates confidence in the minds of investors,  and hence encourages them to undertake investment.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. True

  2. False

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Correct Option: A

Public expenditure can be classified as ________________.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. Direct and transfer expenditure

  2. Developmental and non-developmental expenditure

  3. Productive and non-productive expenditure

  4. All of the above

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Correct Option: D

Deficit budget means _____.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. the government spends more than its revenue

  2. the government earns more than its expenses

  3. the government imports more than its exports

  4. none of the above

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Correct Option: A
Explanation:

A budget deficit is an indicator of financial health in which expenditures exceed revenue. The term budget deficit is most commonly used to refer to government spending rather than business or individual spending, but can be applied to all of these entities.

Plan expenditure in India is met by ________.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. internal debt and other resources

  2. assistance from Aid India Club

  3. assistance from IMF

  4. assistance from OECD countries

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Correct Option: A
Explanation:
  • India has adopted economic planning as a strategy for economic develop­ment. The expenditure incurred on the items relating to five year plans is termed as plan expenditure. Such expen­diture is incurred by the Central Government. A provision is made for such expenditure in the budget of the Central Government. Assistance given by the Central Government to the State Governments and Union Territories for plan purposes also forms part of the plan expenditure. 

The excess of government's revenue expenditure over revenue receipts is known as ______.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. fiscal deficit

  2. primary deficit

  3. budget deficit

  4. revenue deficit

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Correct Option: D
Explanation:

A revenue deficit occurs when the net income generated falls short of the projected net income. This happens when the actual amount of revenue  received and/or the actual amount of expenditures do not correspond with budgeted revenue and expenditure figures. 

Act of selling a part or the whole of shares of selected public sector undertakings (PSU) held by the government to generate capital receipts is called _______.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. investment

  2. disinvestment

  3. savings

  4. none of the above

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Correct Option: B
Explanation:

  • Act of selling a part or the whole of shares of selected public sector undertakings (PSU) held by the government to generate capital receipts is called disinvestment.
  • It is also referred to as 'divestment' or 'divestiture.' In most contexts it refers to government selling partly or fully government owned enterprise.

With the emergence of ________ during the 20th century, the government's role and area of activities has expanded.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. democracy

  2. dictatorship

  3. republics

  4. welfare states

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Correct Option: D
Explanation:

A welfare state is based on the principles of equality of opportunity, equitable distribution of wealth and public responsibility for those unable to avail themselves of the minimal provisions of a good life. Under this system, the welfare of its citizens is the responsibility of the state.

Which one of the following is a direct tax?

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. Excise duty

  2. Customs duty

  3. Service tax

  4. Income tax

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Correct Option: D
Explanation:

An income tax is a tax that governments impose on financial income generated by all entities within their jurisdiction. Income tax is a key source of funds that the government uses to fund its activities and serve the public.

By increasing the expenditure through a deficit budget the government tries to achieve _______.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. economic development

  2. savings

  3. increase in incidence of taxes

  4. regulation of prices

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Correct Option: A
Explanation:

Budget deficit is an indicator of financial health in which expenditures exceed revenue. It refers to government spending rather than business or individual spending and by increasing the expenditure though it, government tries to achieve economic development.