Economics: CUET Mock Test - 2 - Commerce MCQ

Budget is presented every year on first working day of February.

Paper taxes are almost not available in India.

Heavy taxes are imposed on production of those goods which are socially not desirable.

Surplus budget is the state where estimated receipts exceeds estimated expenditure.

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.

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.

Disinvestment refers to the selling of the government's stake in public sector undertakings (PSUs) and other assets. 

Subsidies given by the government is a revenue expenditure as it neither reduce liability nor increase assets.

It is an example of revenue deficit as it do not reduce liabilities.

Primary deficit is the difference between fiscal deficit and interest payments. Primary deficit is zero when these two are equal.

Fiscal deficit and budget deficit are different. Fiscal deficit excludes borrowing while budget deficit includes borrowings.

In an economy, deficit financing leads to an increase in the money supply

During inflationary gap there is excess demand in the economy. So, a deficit budget is prepared.

Fiscal deficit is exclusive of borrowings or current financial year.

Primary Deficit = Fiscal Deficit - Interest Payment 
3,000 = Fiscal Deficit - 500
Fiscal Deficit = 3,000 + 500 = ₹ 3,500

Fiscal deficit = revenue deficit + ( capital expenditure - non debt creating capital receipts ) = 6000 +(14000 - 8000) = 6000 + 6000 =12000

Fiscal deficit is the difference between the government's total expenditure and its total revenue (excluding borrowing) in a particular financial year. It includes all the revenue and capital receipts of the government, as well as its revenue and capital expenditures, but excludes the interest payments on past loans.

There are two main components of budget i.e., revenue budget and capital budget.

Street lights are provided by the government for public use.

Government budget has five major objectives, above two forms part of these objectives.

Excise duty is an example of indirect tax.

Developing countries generally prepares a deficit budget due to its developmental needs.

This scheme of the government aims to reducing the gap in income between people of urban and rural areas.

Special Economic Zones (SEZs) are created by the government to achieve the objective of balanced regional development by promoting economic growth and development in specific areas of the country. These zones offer a range of incentives and benefits to businesses, such as tax exemptions, streamlined regulatory processes, and access to infrastructure and resources.

Revenue expenditure refers to the routine expenses that are necessary for the day-to-day running of defense services. This includes salaries, maintenance, and other operational costs.

Capital expenditure refers to expenses incurred on the acquisition of long-term assets such as equipment, infrastructure, and technology, which are meant for future benefits.

Hence, the correct choice is: Both (b) and (c)