This quiz works best with JavaScript enabled. Home > General Knowledge > Indian Economy > Planning > Fiscal System Of India – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal System Of India Quiz 1 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The tax whose share in overall taxation revenue has gone up rapidly during the planning period is : A) Capital gains tax. B) Income tax. C) Wealth tax. D) Tax on production. Show Answer Correct Answer: D) Tax on production. 2. The RBI uses the following instruments for quantitative central of credit: (i) Cash Reserve Ratio (ii) Bank Rate (iii) Open Market Operations (iv) Margin Requirements Choose your answer from: A) (i) and (ii). B) (ii) and (iv). C) (i), (ii) and (iii). D) (i), (ii), (iii) and (iv). Show Answer Correct Answer: C) (i), (ii) and (iii). 3. In gross domestic saving by sector of origin, the four sectors in order of importance are: A) Household Sector, Government Sector, Public Enterprises, Corporate Sector. B) Government Sector, Household Sector, Public Enterprises, Corporate Sector. C) Household Sector, Public Enterprises, Government Sector, Corporate Sector. D) Household Sector, Corporate Sector, Government Sector, Public Enterprises. Show Answer Correct Answer: D) Household Sector, Corporate Sector, Government Sector, Public Enterprises. 4. What do we call the instruments of monetary policy which directly affect the quantity of money supply? A) Quantitative instruments. B) Qualitative instruments. C) Money instruments. D) None the above. Show Answer Correct Answer: A) Quantitative instruments. 5. Which of the following would signify scarcity in economics? A) Production of 100 kg of a certain item instead of the targeted 150 kg. B) Availability of 10 kg of rice against a demand for 15 kg. C) Availability of post-graduates for jobs of typists. D) Quantity supplied remains the same when price changes. Show Answer Correct Answer: B) Availability of 10 kg of rice against a demand for 15 kg. 6. The national income of India is estimated mainly through: [CBI 1993] A) Production method alone. B) Expenditure method alone. C) Production and expenditure methods. D) Production and income methods. Show Answer Correct Answer: D) Production and income methods. 7. Net factor income from abroad added to GDP gives: A) Per capita income. B) NDP. C) NNP. D) GNP. Show Answer Correct Answer: D) GNP. 8. Increase in Oil Pool Deficit implies: A) Increasing gap between international and domestic oil prices. B) Domestic oil price is comparatively more than international price. C) Government's Fiscal Deficit goes up. D) None of these. Show Answer Correct Answer: A) Increasing gap between international and domestic oil prices. 9. Since 1951, in India: A) National income has increased but per capita income has decreased. B) National and per capita incomes have both increased fast. C) National income has increased and per capita income has also increased but at a slower rate. D) National income and per capita income have increased every year. Show Answer Correct Answer: C) National income has increased and per capita income has also increased but at a slower rate. 10. The highest sector wise contribution to gross domestic saving comes from: A) Public sector. B) Private corporate sector. C) Household sector. D) Cooperative sector. Show Answer Correct Answer: C) Household sector. 11. In a progressive tax, the following statements holds true: A) INCREASES AS THE NATIONAL INCOME INCREASES. B) DOES NOT ALTER AS THE NATIONAL INCOME INCREASES. C) MAY INCREASES PR DECREASES AS THE NATIONAL INCOME INCREASES. D) DECREASES AS THE NATIONAL INCOME INCREASES. Show Answer Correct Answer: A) INCREASES AS THE NATIONAL INCOME INCREASES. 12. This is a paper component of the money supply, today consisting of Federal Reserve notes. A) Coins. B) Currency. C) Both coins and currency. D) Debit cards. Show Answer Correct Answer: B) Currency. 13. The Central Government had recently allowed additional borrowing limit to the States for current financial year subject to which of the following reform(s)?1. Implementation of One Nation One Ration Card System2. Ease of doing business reform3. Implementation of National Education Policy 2020Select the correct answer using the code given below: A) 1 and 2 only. B) 2 and 3 only. C) 1 and 3 only. D) All of the above. Show Answer Correct Answer: A) 1 and 2 only. 14. On account of some national emergency or in order to carry out some secret mission, the government sometimes requires funds but may not give the details of the expenditure estimates. The House grants some lumpsum for this called : A) Supplementary budget. B) Vote of Credit. C) Emergency budget. D) Contingency bill. Show Answer Correct Answer: B) Vote of Credit. 15. In the short run, a producer continues his production as long as he covers: [Asstt Grade 1992] A) Average cost. B) Fixed cost. C) Variable cost. D) Marginal cost. Show Answer Correct Answer: B) Fixed cost. 16. Which of the following are referred to as the developed economies? A) Countries earning huge industrial profits. B) Countries proficient in trade and export. C) Countries having large per capita income. D) Countries advanced in technology. Show Answer Correct Answer: C) Countries having large per capita income. 17. A deflator is a technique of: [IAS 1992] A) Accounting for decline of GNP. B) Adjusting for changes in price level. C) Accounting for higher increase of GNP. D) Adjusting for change in commodity. Show Answer Correct Answer: B) Adjusting for changes in price level. 18. The standard of living in a country is represented by its: A) Unemployment rate. B) Poverty ratio. C) National income. D) Per capita income. Show Answer Correct Answer: D) Per capita income. 19. The exchange of goods and services without using money is known as ..... A) Bartering. B) Near money. C) Double coincidence of wants. D) Fiat money. Show Answer Correct Answer: A) Bartering. 20. Development is : [CDS 1999] A) Not related to economic growth. B) Narrower than economic growth. C) Wider than economic growth. D) Synonymous with economic growth. Show Answer Correct Answer: C) Wider than economic growth. 21. The system of Budget was introduced in India during the viceroyalty of: [Central Excise 1994] A) Elgin. B) Canning. C) Ripon. D) Dalhousie. Show Answer Correct Answer: B) Canning. 22. What is an example of a positive externality? A) Air pollution from factories. B) Eminent domain. C) Allowing people to smoke on school campuses. D) A student getting immunizations in order to go to school. Show Answer Correct Answer: D) A student getting immunizations in order to go to school. 23. The total value of goods and services, produced' in a country during a given period is [CPO SI 2011] A) Disposable income. B) Per capita income. C) Net national income. D) National income. Show Answer Correct Answer: D) National income. 24. Which is the best measure of economic growth of a country ? A) GNP. B) GDP. C) Net revenue. D) None of these. Show Answer Correct Answer: A) GNP. 25. Who is the custodian of Contingency Fund of India? A) THE PRESIDENT. B) PRIME MINISTER. C) RBI. D) FINANCE MINISTER. Show Answer Correct Answer: A) THE PRESIDENT. 26. Who is the chairperson of the Monetary Policy committee of India? A) Finance Minister. B) Prime Minister. C) Chief Economic Advisor. D) RBI Governor. Show Answer Correct Answer: D) RBI Governor. 27. When the government raises taxes, what does it take out of circulation? A) Money. B) People. C) Jobs. D) Credit. Show Answer Correct Answer: A) Money. 28. The first estimate of national income in India was made by: A) V.K.R.V. Rao. B) Dadabhai Naoroji. C) Prof. Sheroi. D) Mahalanobis. Show Answer Correct Answer: B) Dadabhai Naoroji. 29. The basic attribute of a formal organization is : [CPO AC 2003] A) Esteem and prestige. B) Roles and duties. C) Dominance and supremacy. D) Rules and regulations. Show Answer Correct Answer: D) Rules and regulations. 30. Excise Duties are taxes on : A) Export of commodities. B) Sale of commodities. C) Import of commodities. D) Production of commodities. Show Answer Correct Answer: D) Production of commodities. 31. Main bearers of the burden of indirect tax are: A) Consumes. B) Manufacturers. C) Traders. D) Tax payers. Show Answer Correct Answer: A) Consumes. 32. Which of the following is not a component of revenue receipts of the union government? A) Corporate tax receipts. B) Dividends and profits. C) Disinvestment receipts. D) Interest receipts. Show Answer Correct Answer: C) Disinvestment receipts. 33. 'Liquidity trap' is a situation in which: A) People want to hold only cash because prices are falling everyday. B) People want to hold only. cash because there is too much of liquidity in the economy. C) The rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash. D) There is an excess of foregin exchange reserves in the economy leading to excess of money supply. Show Answer Correct Answer: C) The rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash. 34. Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns [IAS 2006] A) Fiscal deficit only. B) Revenue deficit only. C) Both fiscal and revenue deficit. D) Neither fiscal deficit nor revenue deficit. Show Answer Correct Answer: C) Both fiscal and revenue deficit. 35. The per capita income has been low in India because: A) Of regional imbalances. B) Of population growth. C) Of price rise. D) More people are in rural areas. Show Answer Correct Answer: B) Of population growth. 36. Which of the following constitute the internal debt of the Central Government?1.Treasury Bills2.Non-marketable securities issued by Central GovernmentSelect the correct answer using the code given below: A) 1 only. B) 2 only. C) Both 1 and 2. D) ) Neither 1 nor 2. Show Answer Correct Answer: C) Both 1 and 2. 37. Which of the following schemes was intended to tap the black money? A) UTI Bonds. B) SBI Deposit Scheme. C) Long term Operations Scheme. D) India Development Bonds. Show Answer Correct Answer: D) India Development Bonds. 38. "The Fed" refers to the ..... A) Federal Income Tax. B) Federal Government. C) Federal Reserve System. D) Federal Bureau of Investigation. Show Answer Correct Answer: C) Federal Reserve System. 39. Which one of the following is the most important item of non-plan expenditure? A) Interest payment. B) Fertiliser subsidies. C) Defence. D) Loans to public enterprises. Show Answer Correct Answer: A) Interest payment. 40. Fiscal Policy in India is formulated by which of the following? A) RBI. B) MINISTRY OF FINANCE. C) NEETI AAYOG. D) NONE OF THEM. Show Answer Correct Answer: B) MINISTRY OF FINANCE. 41. Share of Direct tax in post economic reform is: A) Increasing. B) Fluctuating. C) Can't say anything. D) Decreasing. Show Answer Correct Answer: A) Increasing. 42. India's progress has been reasonably satisfactory in connection with: A) Reduction in inequalities. B) Growth of GNP. C) Reduction of unemployment. D) Growth of per capita income. Show Answer Correct Answer: B) Growth of GNP. 43. If saving exceeds investment, the national income will : A) Fall. B) Rise. C) Fluctuate. D) Remain constant. Show Answer Correct Answer: D) Remain constant. 44. One of the major objectives of Fiscal Policy in India has been to attain a match between the revenue receipts and revenue expenditures. Which among the following is NOT a measure towards achieving this objective? A) EFFECTS TO SLOW DOWN THE GROWTH RATE IN EXPENDITURE. B) EFFORTS TO INCREASE TAX REVENUE. C) EFFORTS TO RAISE PROFITS OF PUBLIC UNDERTAKINGS. D) ALL ARE CORRECT. Show Answer Correct Answer: B) EFFORTS TO INCREASE TAX REVENUE. 45. The Indian budget includes: A) Revised estimates for the current year. B) Budget estimates for the following year. C) Actual figures of the preceding year. D) All of these. Show Answer Correct Answer: D) All of these. 46. Real national income denotes: A) Per capita income. B) National income at current prices. C) National income at constant prices. D) Net factor income. Show Answer Correct Answer: C) National income at constant prices. 47. After 1991, the Central Government implemented various far-reaching reforms in the area of taxation. This was based on the recommendations of the: [CDS 1999] A) Wanchoo Committee. B) Narsimhan Committee. C) Raj Committee. D) Rajah Chelliah Committee. Show Answer Correct Answer: D) Rajah Chelliah Committee. 48. The prime pirpose of moentary policy is to maintain A) Price stability. B) Wealth. C) Growth. D) Exchange rate. Show Answer Correct Answer: A) Price stability. 49. The recommendations of the Finance Commission are: A) Binding on the government. B) Not binding on the government. C) Generally accepted as a matter of convention. D) Accepted or rejected by the government according to its convenience. Show Answer Correct Answer: D) Accepted or rejected by the government according to its convenience. 50. Dear Money Policy implies: A) High production. B) High interest rates. C) High price level. D) Large money supply. Show Answer Correct Answer: B) High interest rates. 51. Equality in a country can be best brought through A) Progressive expenditure. B) Regressive taxation. C) Regressive expenditure. D) None of the abov. Show Answer Correct Answer: B) Regressive taxation. 52. Which of the following scenarios would cause the nation's money supply to increase? A) Decreasing government spending. B) Lowering interest rates. C) Selling bonds to investors. D) Raising interest rates. Show Answer Correct Answer: B) Lowering interest rates. 53. Which among the following sectors received the largest Central plan outlay in the last few Central Government annual budgets? [CDS 2002] A) Energy. B) Agriculture and allied activities. C) Social Services. D) Communication. Show Answer Correct Answer: A) Energy. 54. The rate of growth of the tertiary sector has been: A) Higher than the overall rate of growth of the net domestic product. B) Lower than the overall rate of growth of the net domestic product. C) Same as the overall rate of growth of the net domestic product. D) Fluctuating when compared to growth of net domestic product. Show Answer Correct Answer: A) Higher than the overall rate of growth of the net domestic product. 55. Which among the following formulates fiscal policy? A) RBI. B) Finance Ministry. C) Planning Commission. D) SEBI. Show Answer Correct Answer: B) Finance Ministry. 56. In recent years the capital outlays for the defence service have been: A) More or less constant. B) Fluctuating frequently. C) Increasing steadily. D) Going down steeply. Show Answer Correct Answer: C) Increasing steadily. 57. Under VAT, how many slabs are there? A) 3. B) 5. C) 2. D) 4. Show Answer Correct Answer: D) 4. 58. A tax Which is paid by the person on whom the tax is incident is called a : A) Local tax. B) Indirect tax. C) Rate. D) Direct tax. Show Answer Correct Answer: D) Direct tax. 59. Which policy would help fight unemployment? A) Expansionary. B) Contractionary. Show Answer Correct Answer: A) Expansionary. 60. The existence of a Parallel Economy or Black Money: [CPO SI 2003] A) Makes the economy more competitive. B) Makes the monetary policies less effective. C) Ensures a better distribution of income and wealth. D) Ensures increasing productive investment. Show Answer Correct Answer: B) Makes the monetary policies less effective. Next →Related QuizzesIndian Economy QuizzesGeneral Knowledge QuizzesFiscal System Of India Quiz 2Fiscal System Of India Quiz 3Fiscal System Of India Quiz 4Indian Economic Development Policy QuizIndian Economy And Planning Quiz 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books