Indian Economy Test -15-Indian Economy-Quiz

Prelims 2020 Test Series-Indian Economy Test -15

Q 1.
Most important expenditure item in the government’s budget is:v

a.)
Interest payments
b.)
Salaries
c.)
Subsidies
d.)
Defence expenditure

Q 2.
Which of the following is not a capital receipt item?

a.)
Revenues from fees and penalties
b.)
Recoveries of loans
c.)
Disinvestment proceeds
d.)
Borrowings

Q 3.
A higher yield for newly issued government securities implies:

a.)
Higher liquidity for government securities
b.)
Lower fiscal deficit
c.)
Higher marketability for the government securities
d.)
Higher interest costs for the government

Q 4.
When the economy grows at a higher rate, its benefit to the government in terms of tax revenue is reflected in the concept of:

a.)
Tax buoyancy
b.)
Tax elasticity
c.)
Taxable capacity
d.)
Tax rigidity

Q 5.
In terms of public expenditure, crowding-out effect implies:

a.)
Excess government subsidies distorting resource allocation
b.)
Excess private expenditure producing inflation
c.)
Market exploitation by the private sector due to reckless government expenditure.
d.)
Excess government expenditure, raising interest rate and depressing the availability of funds.

Q 6.
Consider the following matches of deficits in the budget and their meaning and identify the wrong match among them.

a.)
Fiscal Deficit – stands for borrowings by the government
b.)
Revenue Deficit – Higher current expenditure
c.)
Budget Deficit – Printing of Currency
d.)
Primary Deficit – Borrowings from the RBI

Q 7.
The cost of government’s borrowing from the open market can be gauged from:

a.)
the cut-off price for G-Secs
b.)
the cut-off yield for G-Secs
c.)
the crowding out effect
d.)
the overall interest payments

Q 8.
The BEPS project is designed by:

a.)
BIS to curtail capital erosion of banks
b.)
OECD to fight tax avoidance
c.)
IMF to promote international liquidity
d.)
FSB to promote financial stability

Q 9.
Which of the following is a tax that has to be paid by the foreign investors in India; if they make a profit in the form of an increased value of assets held in the country?

a.)
Capital gains tax
b.)
Minimum alternative tax
c.)
Wealth tax
d.)
Corporate income tax

Q 10.
Tax that depends upon the value of an asset over time is:

a.)
Progressive tax
b.)
Indirect tax
c.)
Direct tax
d.)
Capital gains tax

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