This quiz works best with JavaScript enabled. Home > Indian Economy > Planning > Fiscal System Of India – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Fiscal System Of India Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which one of the following situations makes a firm most efficient? [CDS 2002] A) Falling average costs. B) Rising average costs. C) Constant average costs. D) Lowest average costs. Show Answer Correct Answer: D) Lowest average costs. 2. The minimum effect of Direct Taxes is on : A) Food price. B) Consumer goods. C) Capital goods. D) Income. Show Answer Correct Answer: D) Income. 3. Which one of the following statements regarding the levying, collecting and distribution of Income Tax is correct? [IAS 1999] A) The Union levies, collects and distributes the proceeds of income tax between itself and the states. B) The Union levies, collects and keeps all the proceeds of income tax to itself. C) The Union levies and collects the tax but all the proceeds are distributed among the states. D) Only the surcharge levied on income tax is shared between the Union and the States. Show Answer Correct Answer: A) The Union levies, collects and distributes the proceeds of income tax between itself and the states. 4. National income ignores [CDS 2012] A) Sales of firm. B) Salary of employees. C) Exports of the IT sector. D) Sale of land. Show Answer Correct Answer: B) Salary of employees. 5. The South Asian Free Trade Agreement (SAFTA) was introduced with a view of levying how much customs duty for trading any product within the SAARC zone? [RBI Grade B Officer 2011] A) 5%. B) 4%. C) 2%. D) 1%. E) No customs duty. Show Answer Correct Answer: E) No customs duty. 6. Tax collection of Central govt. was lowest as compare to G.D.P., in which of the following year? A) 1999-2000. B) 2000-2001. C) 2001-2002. D) 2002-2003. Show Answer Correct Answer: A) 1999-2000. 7. Which of the following is not a method of estimating national income? [I. Tax & Central Excise 1991] A) Income method. B) Value-added method. C) Expenditure method. D) Export-import method. Show Answer Correct Answer: D) Export-import method. 8. Fresh evalution of every item of expenditure from the very beginning of each financial year is called: [SBI PO 1991] A) Fresh Budgeting. B) Deficit Budgeting. C) Performance Budgeting. D) Zero-based Budgeting. Show Answer Correct Answer: D) Zero-based Budgeting. 9. Consider the following statements regarding Fisal Policy:a. It helps to maintain the economy's growth rate so that certain economic goals can be achieved.b. It aims to achieve full employment, or near full employment, as a tool to recover from low economic activity.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. 10. Which one of the following forms the largest share of deficit in Govt. of India budget? [UP PCS 2002] A) Primary deficit. B) Fiscal deficit. C) Revenue deficit. D) Budgetary deficit. Show Answer Correct Answer: B) Fiscal deficit. 11. Economic growth is usually coupled with [CSAT 2011] A) Deflation. B) Inflation. C) Stagflation. D) Hyperinflation. Show Answer Correct Answer: B) Inflation. 12. Metallic forms of money such as pennies, nickles, dimes, and quarters. A) Coins and currency. B) Currency. C) Coins. D) Debit cards. Show Answer Correct Answer: C) Coins. 13. According to the law of demand, when: A) Price increases demand decreases. B) Price decreases demand decreases. C) Price increases demand increases. D) Price decreases demand does not change. Show Answer Correct Answer: A) Price increases demand decreases. 14. To know whether the rich are getting richer and the poor getting poorer, it is necessary to compare; [IAS 1994] A) The availability of foodgrains among two sets of people, one rich and the other poor, over different periods of time. B) The distribution of income of an identical set of income recipients in different periods of time. C) The wholesale price index over different periods of time for different regions. D) The distribution of income of different sets of income recipients at a point of time. Show Answer Correct Answer: B) The distribution of income of an identical set of income recipients in different periods of time. 15. In India, deficit financing is used for raising resources for A) Economic development. B) Redemption of public debt. C) Adjusting the balance of payments. D) Reducing the foreign debt. Show Answer Correct Answer: A) Economic development. 16. With reference to revenue deficit, consider the following statements:1. It includes only those transactions that affect current income and expenditure of government.2. It considers the current borrowing by the government.As per the FRBM Act, the government is required to reduce the revenue deficit to 3% of the GDPWhich of the statements given above is/are correct? A) 1 only. B) 1 and 2 only. C) 2 and 3 only. D) 1, 2, and 3. Show Answer Correct Answer: A) 1 only. 17. Deficit financing leads to inflation in general, but it can be checked if: A) Government expenditure leads to increase in aggregate supply in ratio of aggregate demand. B) Aggregate demand is increased only. C) All the expenditure is denoted national debt payment only. D) All the above. Show Answer Correct Answer: A) Government expenditure leads to increase in aggregate supply in ratio of aggregate demand. 18. Which of the following is not shared by the Centre and the States? A) Sales Tax. B) Corporation Tax. C) Income Tax. D) Union Excise Duties. Show Answer Correct Answer: A) Sales Tax. 19. When the Reserve Bank of India announces an increase of the Cash Reserve 'Ratio, what does it mean? [IAS 2010] A) The commercial banks will have less money to lend. B) The Reserve Bank of India will have less money to lend. C) The Union Government will have less money to lend. D) The commercial banks will have more money to lend. Show Answer Correct Answer: A) The commercial banks will have less money to lend. 20. Fiscal deficit in the Union Budget means: [IAS 1994] A) The difference between current expenditure and current revenue. B) Net increase in Union Government's borrowings from the Reserve Bank of India. C) The sum of budgetary deficit and net increase in internal and external borrowings. D) The sum of monetised deficit and budgetary deficit. Show Answer Correct Answer: C) The sum of budgetary deficit and net increase in internal and external borrowings. ← PreviousNext →Related QuizzesIndian Economy QuizzesFiscal System Of India Quiz 1Fiscal System Of India Quiz 2Fiscal System Of India Quiz 3Fiscal System Of India Quiz 4Fiscal System Of India Quiz 5Fiscal System Of India Quiz 7Fiscal System Of India Quiz 8Fiscal System Of India Quiz 9Fiscal System Of India Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books