Economics: CUET Mock Test - 2
40 Questions MCQ Test CUET Mock Test Series | Economics: CUET Mock Test - 2
| 1 Crore+ students have signed up on EduRev. Have you? |
Budget is a statement of actual annual receipts and expenditures of the government.
Central Budget is presented in India on ______every year by the Finance Minister.
Budget is presented every year on first working day of February.
In India _______ type of taxes are generally of no or little significance due to their very low revenue yield to government?
Paper taxes are almost not available in India.
Production of goods which are socially harmful are discouraged by..............
Heavy taxes are imposed on production of those goods which are socially not desirable.
Surplus budget is when actual receipts exceeds estimated expenditures.
Surplus budget is the state where estimated receipts exceeds estimated expenditure.
In 2017 government of India brought an important reform in the tax system of the country by introducing GST.
Which of the following type of tax is GST?
GST is a type of indirect tax, as it is imposed on the production of goods and burden of this can be transferred to others.
Rahul dies without a legal heir. His property stands transferred to the government. The income under this head will be referred to as ‘Special assessment’.
It will be referred to as ‘escheat’. Special assessment is paid by those owners whose value of property has increased due to developmental activities of the government.
Revenue from this form of tax is negligible.
Primary deficit is the excess of borrowings of current year over the interest payments of previous years.
This kind of expenditures arises all of a sudden.
Government budget is prepared for upcoming fiscal year.
Dis -investment is the process of selling a portion of government holdings in the PSUs.
Subsidies given by the government is a revenue expenditure as it neither reduce liability nor increase assets.
_______ deficit includes interest payment by the government on the past loans.
It is an example of revenue deficit as it do not reduce liabilities.
Primary deficit in a government budget will b e zero, when _______
Primary deficit is the difference between fiscal deficit and interest payments. Primary deficit is zero when these two are equal.
Budget deficit is equal to total expenditure minus total receipts.
Fiscal deficit and budget deficit are different. Fiscal deficit excludes borrowing while budget deficit includes borrowings.
Which of the following measures of meeting deficit in budget, leads to an increase in money supply in the economy?
Any of the above method can be used to finance the deficit of budget.
During inflationary gap there is excess demand in the economy. So, a deficit budget is prepared.
If borrowings and other liabilities are reduced to the budget deficit, we get
Fiscal deficit is exclusive of borrowings or current financial year.
If primary deficit is ₹ 3,000 and interest payment is ₹ 500, the fiscal deficit is
Primary Deficit = Fiscal Deficit - Interest Payment
3,000 = Fiscal Deficit - 500
Fiscal Deficit = 3,000 + 500 = ₹ 3,500
In a government budget, non-debt creating capital receipts is ₹ 200, revenue receipts are ₹ 1,500, borrowings are ₹ 150 while capital receipts and revenue receipts are respectively ₹ 250 and ₹ 300. What will be the fiscal deficit in this case?
Fiscal deficit is equal to borrowings of the given period. So, fiscal deficit will be equal to ₹ 150
_______ deficit includes interest payment by the government on the past loans.
Fiscal deficit and revenue deficit are inclusive of interest payments of previous year.
There are two main components of budget i.e., revenue budget and capital budget.
Street lights are provided by the government for public use.
Economic stability and equitable distribution of income and wealth can be achieved by the budgetary policy of the government.
Government budget has five major objectives, above two forms part of these objectives.
_______ is not an example of non-tax revenue from below.
Excise duty is an example of indirect tax.
Developing countries generally prepares a balanced budget.
Developing countries generally prepares a deficit budget due to its developmental needs.
Recently the union government introduced TJjjawala Yojna, which provides free LPG commission to the women in rural area. Which of the following objective of government budget is fulfilled in this case?
This scheme of the government aims to reducing the gap in income between people of urban and rural areas.
SEZ are created by the government to achieve the objective of
Special Economic Zones are created by the government to promote development of backward areas. This is in line with the objective of reallocation of resources.
Defence expenditure are an exception of revenue expenditure as it is a very large service area.
Fiscal deficit is financed by borrowings. So, these two are equal.
Choose the correct statement from given below about demonetisation announced on 8th November, 2016.
Demonetisation is an action taken by the government in association with the Central Bank of the country.
Primary deficit includes interest payment on previous borrowings.
Primary deficit excludes interest payments on previous loans.
Fiscal deficit and borrowings are one or the same thing.
Fiscal deficit is financed by borrowings only.
Assertion (A): Government budget is an annual estimated statement of revenue and expenditure during coming fiscal year.
Reason (R): Through government budget, it tries to reduce the regional variations.
Alternatives
Goverment budget is an annual and estimated statement of receipts and expenditure. Various objectives are targetted using the budget.
Assertion (A): Public goods are non-rivalrous.
Reason (R): The benefits of such goods can be enjoyed by all and are not restricted to any one person.
Alternatives
Public goods are the goods provided by the government for general public and no individual can be denied its consumption whether he pay taxes or not.
Assertion (A): Revenue budget of Government represents non-debt creating incomes.
Reason (R): Government budget is majorly comprised of receipts and expenditures on various account.
Alternatives
Government budget has two components revenue budget and capital budget. Revenue components includes those incomes which do not impact assets.
Directions: Read the following case study and answer the questions
Prime Minister Narendra Modi ’s second budget in seven months disappointed investors who were hoping for big-bang stimulus to revive growth in Asia’s third-largest economy. The fiscal plan delivered by Finance Minister Nirmala Sitharaman proposed tax reductions for individuals and wider deficit targets, but failed to provide specific steps to fix a struggling financial sector, improve infrastructure and create jobs. Stocks slumped, reflecting the subdued sentiment.
“Far from being a game changer, the budget provides little in terms of short-term growth stimulus,” said Priyanka Kishore, head of India and South-East Asia economics at Oxford Economics Ltd. in Singapore. “While income tax cuts will provide some relief on the consumption front, the multiplier effect is low and the overall stance of the budget is not expansionary.”
The focus now shifts to the Reserve Bank of India’s interest rate decision on February 6, 2020. Flowever, having already cut interest rates five times last year and with inflation exceeding 7 per cent, well above the central bank’s target, there’s limited scope for Governor Shaktikanta Das to ease more.
Q. A direct tax cut in government budget helps to stimulate economic growth by
A fall in tax rate leads to rise in disposable income (i.e., income after tax which further enhances productivity and growth.
Directions: Read the following case study and answer the questions
Prime Minister Narendra Modi ’s second budget in seven months disappointed investors who were hoping for big-bang stimulus to revive growth in Asia’s third-largest economy. The fiscal plan delivered by Finance Minister Nirmala Sitharaman proposed tax reductions for individuals and wider deficit targets, but failed to provide specific steps to fix a struggling financial sector, improve infrastructure and create jobs. Stocks slumped, reflecting the subdued sentiment.
“Far from being a game changer, the budget provides little in terms of short-term growth stimulus,” said Priyanka Kishore, head of India and South-East Asia economics at Oxford Economics Ltd. in Singapore. “While income tax cuts will provide some relief on the consumption front, the multiplier effect is low and the overall stance of the budget is not expansionary.”
The focus now shifts to the Reserve Bank of India’s interest rate decision on February 6, 2020. Flowever, having already cut interest rates five times last year and with inflation exceeding 7 per cent, well above the central bank’s target, there’s limited scope for Governor Shaktikanta Das to ease more.
Q. What will be the impact on the overall money supply if government reduces income tax slabs?
Government budget is an important aspect which impacts almost all macroeconomic indicators. A tax cut by the government leads to increase in savings in the banks which further leads to increase in money supply.
Directions: Read the following case study and answer the questions.
Budgetary deficits must be financed by either taxation, borrowing or printing money. Governments have mostly relied on borrowing, giving rise to what is called government debt. If the government continues to borrow year after year, then interest payments increase and these further increase the debt. Also, government borrowing from the people reduces the savings available to the private sector. This reduces capital formation and growth. These debts increases the burden on future generations as the debts raised today are required to be paid off in future.
Q. Budgetary deficits can be financed by
Deficit is the excess of expenditure over receipts and any of the above steps can be taken to fill this gap.
|
118 tests
|
|
Use Code STAYHOME200 and get INR 200 additional OFF
|
Use Coupon Code |
|
118 tests
|
Download free EduRev App
Related content with Economics: CUET Mock Test - 2
|
|
|
|
Related tests with Economics: CUET Mock Test - 2
|
|
|
|
|
|
© EduRev
|
Education Revolution
|
Follow Us
|
