This quiz works best with JavaScript enabled. Home > General Knowledge > Indian Economy > Planning > Fiscal System Of India – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal System Of India Quiz 3 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A contractionary policy means that the Fed is attempting to A) Increase the size of the nation's money supply. B) Decrease the size of the nation's money supply. Show Answer Correct Answer: B) Decrease the size of the nation's money supply. 2. Railway Budget in India was separated from general budget in : A) 1947-48. B) 1924-25. C) 1941-42. D) 1950-51. Show Answer Correct Answer: B) 1924-25. 3. Which policy would help fight inflation? A) Expansionary. B) Contractionary. Show Answer Correct Answer: B) Contractionary. 4. Many times we see in financial journals/bulletins a term M3. What is M3? [RBI Grade B Officer 2011] A) Currency in circulation on a particular day. B) Total value of foreign exchange on a particular day. C) Total value of export credit on a given date. D) Total value of the tax collected in a year. E) None of these. Show Answer Correct Answer: E) None of these. 5. Which one of the following is the largest item of expenditure of the Government of India on revenue account?a) Defenceb) Subsidiesc) Pensionsd) Interest payment A) ONLY A. B) A, B, AND C. C) ONLY D. D) C, D, AND A. Show Answer Correct Answer: C) ONLY D. 6. With respect to the government expenditure in India, which of the following is / are Transfer Payments?1.The payments which are made by the government to its employees2.The payments which are made as financial aid in a social welfare programme3.The payments which are made to foreign countries and institutions as interests on loans taken in past4.The payments which are made to oil companies in lieu of the subsidiesSelect the correct option from the codes given below: A) ONLY 1 AND 3. B) 1, 2, 3, 4. C) ONLY 2 AND 4. D) ONLY 1, 2 AND 3. Show Answer Correct Answer: C) ONLY 2 AND 4. 7. If the price of an inferior good falls, its demand: [CPO SI 2003] A) Rises. B) Falls. C) Remains constant. D) Can be any of the above. Show Answer Correct Answer: C) Remains constant. 8. Which one of the following is the updated base for Wholesale Price Index (WPI) ? [Corporation Bank PO 2011] A) 2005-2006. B) 2004-2005. C) 2003-2004. D) 2006-2007. E) 2002-2003. Show Answer Correct Answer: B) 2004-2005. 9. Which of the following is fiscal Measure to controll inflation in India? A) Repo Rate. B) Statutory Liquidity Ratio. C) Public Expenditure. D) Cash Reserve Ratio. Show Answer Correct Answer: C) Public Expenditure. 10. Consider the following statements regarding plan and non-plan expenditure1.Plan expenditure is believed to be under the discretion of the central government, whereas non-plan expenditure is not part of discretion of the central government2.The distinction between plan and non-plan expenditures has been eliminated from Budget 2017-18 onwards.Which of the statements given above is/are correct? 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. 11. Gross National Product is less than Gross Domestic Product depending upon whether: A) Depreciation is included or not. B) Net factor income from abroad is positive or negative. C) Indirect taxes are more than subsidies. D) Indirect taxes are less than subsides. Show Answer Correct Answer: B) Net factor income from abroad is positive or negative. 12. Which among the following is the regulatory authority for giving clearance for External Commercial borrowing? A) Foreign Investment Promotion Council. B) RBI. C) SEBI. D) Foreign Investment Promotion Board. Show Answer Correct Answer: B) RBI. 13. If and economy experiences a dramatic rise in prices, which fiscal policy action could be taken? A) Reducing government spending. B) Selling securities on the open market. C) Raising interest rates. D) Raising reserve requirements. Show Answer Correct Answer: A) Reducing government spending. 14. Which of the following is poorest state in India? A) Bihar. B) M.P. C) Odisha. D) U.P. Show Answer Correct Answer: C) Odisha. 15. Sales tax is a ..... tax A) Progressive. B) Regressive. Show Answer Correct Answer: B) Regressive. 16. Who is the chairman of 13th Finance Commission? A) Bimal Jalan. B) M.N. Vohra. C) C. Rangarajan. D) Vijay Kelkar. Show Answer Correct Answer: D) Vijay Kelkar. 17. Which one of the following statements appropriately describes the "fiscal stimulus" ? A) (a.) It is a massive investment by the Government in manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth. B) (b.) It is an intense affirmative action of the Government to boost economic activity in the country. C) (c.) It is Government's intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation. D) (d.) It is an extreme affirmative action by the Government to pursue its policy of financial inclusion. Show Answer Correct Answer: B) (b.) It is an intense affirmative action of the Government to boost economic activity in the country. 18. Gross National Product at market prices is defined as : [CPO AC 2003] A) The market value of all final goods and services produced in an economy taking into account net factor income from abroad. B) The market value of all final goods and services produced in an economy. C) The market value of all final goods and services produced in an economy plus indirect taxes. D) The market value of all final goods and services produced in an economy plus indirect taxes minus subsidies. Show Answer Correct Answer: A) The market value of all final goods and services produced in an economy taking into account net factor income from abroad. 19. What do we call the rate at which the Reserve Bank of India lends money to commercial banks? A) CRR. B) SLR. C) Repo-rate. D) Reserve-repo rate. Show Answer Correct Answer: C) Repo-rate. 20. After the initiation of economic reforms in 1991-92 the percentage share of: [CDS 1999] A) Direct taxes increased and that of indirect taxes decreased in gross tax revenue. B) Both direct and indirect taxes increased in gross tax revenue. C) Both direct and indirect taxes decreased in gross tax revenue. D) Direct taxes decreased and that of indirect taxes increased in gross tax revenue. Show Answer Correct Answer: B) Both direct and indirect taxes increased in gross tax revenue. 21. Which of the following is not part of state tax? A) Land revenue. B) Entertainment tax. C) Sales and purchase of newspapers. D) Stamp duty other than financial documents. Show Answer Correct Answer: C) Sales and purchase of newspapers. 22. The rate of growth of per capita income is equal to: A) Rate of growth of national income minus the rate of growth of population. B) Growth in national income divided by the increase in population. C) Rate of growth of national income divided by the rate of growth of population. D) Rate of growth of national income. Show Answer Correct Answer: A) Rate of growth of national income minus the rate of growth of population. 23. Which one among the following is not a component of fiscal policy? [Asstt Commdt 2011] A) Taxation policy. B) Public debt policy. C) Public expenditure policy. D) Trade policy. Show Answer Correct Answer: D) Trade policy. 24. 'Balanced Growth' means: A) Growth which brings about a balance between the rich and the poor. B) Growth which brings about a balance between the public and private sectors. C) Growth which brings about a balance between the traditional and modern sector. D) Growth pattern on which simultaneous investments are made in all the sectors of the economy, viz., Agriculture, Industry, Transport, Communication, etc. Show Answer Correct Answer: D) Growth pattern on which simultaneous investments are made in all the sectors of the economy, viz., Agriculture, Industry, Transport, Communication, etc. 25. An appropriate fiscal policy to combat a recession would be to increase which of the following? A) Taxes. B) Government spending. C) Interest rates. D) The money supply. Show Answer Correct Answer: B) Government spending. 26. National income of India is compiled by: A) Indian Statistical Institute. B) Central Statistical Organisation. C) National Development Council. D) Finance Commission. Show Answer Correct Answer: B) Central Statistical Organisation. 27. Fiscal deficit in the union budget is equal to A) Net increase in internal and external borrowings. B) The difference between current expenditure and current revenue. C) The sum of monetized deficit and budgetary deficit. D) Net increase in the union government's borrowing from the Reserve Bank of India. Show Answer Correct Answer: A) Net increase in internal and external borrowings. 28. Among the structural changes which of the following is not wholly welcome? A) Increase in the share of construction in the GNP. B) Relative contribution of agriculture to our GNP is declining. C) Marked improvement in the contribution of manufacturing to the GNP. D) Substantial increase in the percentage contribution of public administration and defence to GDP. Show Answer Correct Answer: D) Substantial increase in the percentage contribution of public administration and defence to GDP. 29. The per capita income is obtained by: A) Summing up the income of all the citizens of the country. B) Dividing national income by the population. C) Estimating the minimum income of individual citizens. D) Dividing the total national capital with the profit earned. Show Answer Correct Answer: B) Dividing national income by the population. 30. What is meant by 'Underwriting', the term frequently used in financial sector? [Punjab & Sindh Bank 2011] A) Under valuation of the assets. B) The Act of taking on a risk for a fee. C) Giving a Guarantee that a loan will not become a bad loan. D) The act of permission to float an IPO. E) None of the above. Show Answer Correct Answer: A) Under valuation of the assets. 31. What is 'Recession'? A) Rise in the cost of production, especially because of wage increase. B) Increase in money supply without a matching increase in production. C) Reduction in production and employment for want of sufficient demand for goods. D) None of these. Show Answer Correct Answer: C) Reduction in production and employment for want of sufficient demand for goods. 32. Companies pay Corporation Tax on their: [UDC 1993] A) Sales proceeds. B) Incomes. C) Production. D) Investment. Show Answer Correct Answer: B) Incomes. 33. Which of the following is an objective of fiscal policy A) Foreign exchange market. B) Manage rate of interest. C) Balance of Payment. D) Price stability. Show Answer Correct Answer: D) Price stability. 34. Fiscal consolidation is one of the objectives of India's economic policy. Which of the following would help in fiscal consolidation?1. increasing taxes2.getting more loans3.reducing subsidiesSelect the correct answer using the codes given below. A) 1 and 2 only. B) 1 and 3 only. C) ) 2 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: B) 1 and 3 only. 35. ..... is the price paid for the use of money. A) Monetary policy. B) Fiscal policy. C) Gold. D) The interest rate. Show Answer Correct Answer: D) The interest rate. 36. An advalorem duty is a tax on the basis of: [IAS 1988] A) The unit of the commodity. B) The value added. C) The advertisement expenditure. D) The price of a commodity. Show Answer Correct Answer: D) The price of a commodity. 37. National income calculated at current prices in India has shown a tendency to rise at a faster rate than national income at constant prices. This is because: A) India's population has been rising fast. B) General price level in the economy has been rising rapidly. C) Statistically manipulations are employed by the Planning. D) Base year chosen is an abnormal year. Show Answer Correct Answer: B) General price level in the economy has been rising rapidly. 38. Which of the following is the basis for determining the national income? A) Total revenue of the State. B) Net profit earned and expenditure incurred by the State. C) Production of goods and services. D) All of the above. Show Answer Correct Answer: C) Production of goods and services. 39. Which of the following is correct regarding the Gross Domestic Saving In India? [Asstt Grade 1992] A) Contribution of Household sector is the largest. B) Contribution of Government sector is the largest. C) Contribution of Corporate sector is the largest. D) None of these. Show Answer Correct Answer: A) Contribution of Household sector is the largest. 40. The measure of a worker's real wage is : [CPO SI 2002] A) His daily earnings. B) The change in his productivity over a given time. C) The purchasing power of his earnings. D) His earning after deduction at source. Show Answer Correct Answer: C) The purchasing power of his earnings. 41. The primary role of the Federal Reserve Bank is to steer the economy by A) Setting spending levels. B) Controlling the money supply. C) Controlling the budget. D) Loaning out money. Show Answer Correct Answer: B) Controlling the money supply. 42. Buyer's market denotes the place where: A) The supply exceeds the demand. B) The demand exceeds the supply. C) The demand and supply are well balanced. D) Commodities are available at competitive rates. Show Answer Correct Answer: B) The demand exceeds the supply. 43. When the government spends more money than they take in each year is called a ..... ? A) Surplus. B) Deficit. C) Debt. D) Expansionary. Show Answer Correct Answer: B) Deficit. 44. An individual's actual standard of living can be assessed by [SSC Grad 2011] A) Per Capita Income. B) Disposable Personal Income. C) Gross National Income. D) Net National Income. Show Answer Correct Answer: B) Disposable Personal Income. 45. Which of the following is not required while computing Gross National Product (GNP)? [Asstt Grade 1992] A) Per capita income of citizens. B) Purchase of goods by government. C) Net foreign investment. D) Private investment. Show Answer Correct Answer: A) Per capita income of citizens. 46. An expansionary policy means that the Fed is attempting to A) Decrease the size of the nation's money supply. B) Increase the size of the nation's money supply. Show Answer Correct Answer: B) Increase the size of the nation's money supply. 47. Fiscal policy in India is formulated by ..... A) Reserve Bank of India. B) Planning Commission. C) Finance Ministry. D) Securities and Exchange Board of India. Show Answer Correct Answer: B) Planning Commission. 48. The Zero Base Budgeting in India was first experimented from: A) April, 1987. B) April, 2000. C) April, 1991. D) None of these. Show Answer Correct Answer: A) April, 1987. 49. Which of the following is not true about 'vote-on-account'? [Bank PO 1991] A) It is a budget presented in the Parliament to cover the deficit left by the last budget. B) It does not allow the Government to set for the economic policies of the new plan which starts from April 1. C) It prevents the Government from imposing fresh taxes or withdrawing old one. D) This allows the Government to withdraw an amount for a period with the consent of Parliament. Show Answer Correct Answer: A) It is a budget presented in the Parliament to cover the deficit left by the last budget. 50. An amount given by a government agency or even private body to encourage a particular economic activity is a : A) Subsidy. B) Loan. C) Mutual fund. D) Grant. Show Answer Correct Answer: A) Subsidy. 51. What is the main source of revenue to meet different expenditures? A) Internal borrowings. B) Income tax. C) Excise duties. D) Customs duties. Show Answer Correct Answer: A) Internal borrowings. 52. Value-added tax is : A) An ad valorem tax on domestic final consumption collected at all stages between production and the point of final sale. B) An ad valorem tax on final consumption collected at the manufacturing level. C) Tax on final consumption collected at the consumption stage. D) A special tax levised by states on products from other states. Show Answer Correct Answer: A) An ad valorem tax on domestic final consumption collected at all stages between production and the point of final sale. 53. A tax that takes away a higher proportion of one's income as the income rises is termed as [I. Tax & Central Excise 1990] A) Regressive tax. B) Proportional tax. C) Indirect tax. D) Progressive tax. Show Answer Correct Answer: D) Progressive tax. 54. Gross National Income is always more than Net National Income because it includes: A) Foreign income. B) Capital consumption allowance. C) Indirect taxes. D) Direct taxes. Show Answer Correct Answer: B) Capital consumption allowance. 55. During a contraction / recession, the Federal Government should use A) A contractionary fiscal policy. B) An expansionary fiscal policy. Show Answer Correct Answer: B) An expansionary fiscal policy. 56. In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years? [IAS 2010] A) Corporation tax. B) Personal income tax. C) Service tax. D) Excise duty. Show Answer Correct Answer: D) Excise duty. 57. Math the following: [CDS 1999] List I List II A. Income Tax 1. Levied and collected by the Central Government B. Corporation 2. Levied and collected Tax by the Central Government and shared with the State Governments C. Professional 3. Levied by the Central Tax Government but collected and appropriated by the State Governments D. Stamp Duties 4. Levied and collected by the State Governments 5. Levied and collected by the local bodies A B C D A) 2 1 5 3. B) 2 1 4 3. C) 1 2 3 5. D) 1 2 3 4. Show Answer Correct Answer: B) 2 1 4 3. 58. What is a fiscal deficit? [Punjab & Sindh Bank 2011] A) It is a gap between the values of the exports and imports. B) It is a gap between exports and imports minus external borrowings. C) It is a gap between total expenditure and total receipts of the Govt. D) It is a gap between total receipts minus External Borrowing. E) None of the above. Show Answer Correct Answer: C) It is a gap between total expenditure and total receipts of the Govt. 59. Fiscal Policy is concerned with A) Government Spending and taxation. B) Consumer spending and productivity. C) Government spending and the money supply. D) Taxation and inflation. Show Answer Correct Answer: A) Government Spending and taxation. 60. The sum total of incomes received for the services of labour, land or capital in a country is called: A) National income. B) Gross domestic product. C) Gross domestic income. D) Gross national income. Show Answer Correct Answer: A) National income. ← PreviousNext →Related QuizzesIndian Economy QuizzesGeneral Knowledge QuizzesFiscal System Of India Quiz 1Fiscal System Of India Quiz 2Fiscal System Of India Quiz 4Indian Economic Development Policy QuizIndian Economy And Planning Quiz 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books