Fiscal System of India Set 1

Bachelor of Business Administration (BBA),

Bachelor of Arts (BA),

Bachelor of Arts in Economics (BA Economics),

Union Public Service Commission (UPSC)

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This set of Indian Economy Multiple Choice Questions & Answers (MCQs) focuses on Fiscal System of India Set 1

Q1 | Which of the following is not a method of estimating national income? [I. Tax & CentralExcise 1991]
  • Income method
  • Value-added method
  • Expenditure method
  • Export-import method
Answer: Export-import method
Q2 | The national income of India is estimated mainly through: [CBI 1993]
  • production method alone
  • expenditure method alone
  • production and expenditure methods
  • production and income methods
Answer: production and income methods
Q3 | Which of the following are referred to as the developed economies?
  • Countries earning huge industrial profits
  • Countries proficient in trade and export
  • Countries having large per capita income
  • Countries advanced in technology
Answer: Countries having large per capita income
Q4 | An advalorem duty is a tax on the basis of: [IAS 1988]
  • the price of a commodity
  • the value added
  • the advertisement expenditure
  • the unit of the commodity
Answer: the price of a commodity
Q5 | Consider the following statements with regard to Statutory liquidity Ratio (SLR) : 1. To meet SLR, commercial banks can use cash only. 2. SLR is maintained by the banks with themselves. 3. SLR restricts the banks' leverage in pumping more money into the economy. Which of the statements given above is/are correct? [CDS 2010]
  • 1, 2 and 3
  • 1 and 3
  • 2 and 3
  • 2 only
Answer: 2 and 3
Q6 | Which of the following is not true about 'vote-on-account'? [Bank PO 1991]
  • It is a budget presented in the Parliament to cover the deficit left by the last budget
  • It does not allow the Government to set for the economic policies of the new plan which starts from April 1
  • It prevents the Government from imposing fresh taxes or withdrawing old one
  • This allows the Government to withdraw an amount for a period with the consent of Parliament
Answer: It is a budget presented in the Parliament to cover the deficit left by the last budget
Q7 | Consider the following statements: 1. The repo rate is the rate at which other banks borrow from the Reserve Bank of India. 2. A value of 1 for Gini Coefficient in a country implies that there is perfectly equal income for everyone in its population. Which of the statements giver, above is/are correct? [IAS 2007]
  • 1 only
  • 2 only
  • Both 1 and 2
  • Neither 1 nor 2
Answer: 1 only
Q8 | The system of Budget was introduced in India during the viceroyalty of: [Central Excise 1994]
  • Canning
  • Dalhousie
  • Ripon
  • Elgin
Answer: Canning
Q9 | Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns [IAS 2006]
  • fiscal deficit only
  • revenue deficit only
  • both fiscal and revenue deficit
  • neither fiscal deficit nor revenue deficit
Answer: both fiscal and revenue deficit
Q10 | Temporary tax levied to obtain additional revenue is called:
  • cess
  • rate
  • fee
  • surcharge
Answer: surcharge
Q11 | A tax Which is paid by the person on whom the tax is incident is called a :
  • local tax
  • indirect tax
  • direct tax
  • rate
Answer: direct tax
Q12 | Rate of growth of an economy is measured in terms of:
  • per capita income
  • industrial development
  • number of people who have been lifted above the poverty line
  • national income
Answer: national income
Q13 | The standard of living in a country is represented by its:
  • national income
  • per capita income
  • poverty ratio
  • unemployment rate
Answer: per capita income
Q14 | Which is the best measure of economic growth of a country ?
  • GNP
  • GDP
  • Net revenue
  • None of these
Answer: GNP
Q15 | Since 1951, in India:
  • national income has increased but per capita income has decreased
  • national and per capita incomes have both increased fast
  • national income has increased and per capita income has also increased but at a slower rate
  • national income and per capita income have increased every year
Answer: national income has increased and per capita income has also increased but at a slower rate
Q16 | Which of the following expenses do not require the sanction of Parliament?I. Salary and allowances of the President and CAG II. Debt charges of the Government III. Defence expenditure IV. Maintenance expenditure of embassies
  • I, II, III, IV
  • I, II, III
  • I, II
  • II, IV
Answer: I, II
Q17 | Once the demands for grants and expenditure of different departments are passed by the Parliament, a bill to draw money from Consolidated Fund India for these purposes is introduced. This bill is called:
  • finance bill
  • money bill
  • appropriation bill
  • credit budget bill
Answer: appropriation bill
Q18 | By which bill does the government make arrangement for the collection of revenues for a year?
  • Supplementary Budget
  • Finance Bill
  • Fiscal Budget
  • Economic Bill
Answer: Finance Bill
Q19 | Grants or advances made by the House to enable the government to carry on until thevoting of the demands for grants and passing of the General Appropriation Bill is called:
  • vote on account
  • complementary budget
  • supplementary budget
  • contingency budget
Answer: vote on account
Q20 | 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 :
  • emergency budget
  • vote of Credit
  • contingency bill
  • supplementary budget
Answer: vote of Credit
Q21 | Consider the following statements: (A) In India since independence the share of the primary sector has been declining while the shares. of the secondary and tertiary sectors have been increasing (B) This trend shows that Indian economy is passing through the transition from an agricultural to an industrial economy While one of the following is correct?
  • both A and Bare correct
  • both A and Bare wrong
  • A is correct, B is wrong
  • A is wrong, B is correct
Answer: both A and Bare correct
Q22 | Which of the following gives a correct picture of the share of various sectors ineconomic growth in India over the years? 1. Primary sector-stagnant 2. Secondary sector-increasing 3. Tertiary sector-decreasing
  • 1 and 2
  • 2 and 3
  • 2 only
  • 1 only
Answer: 2 only
Q23 | Which of the following is wrongly matched?
  • Cess-a compulsory levy collected by the government for a particular purpose from all persons
  • Rate-a compulsory levy collected by the government from the beneficiaries of particular schemes
  • Corporation tax-levied by corporations for civic amenities
  • Proportional tax-a tax levied at the same time at all levels of the base
Answer: Corporation tax-levied by corporations for civic amenities
Q24 | The basic attribute of a formal organization is : [CPO AC 2003]
  • esteem and prestige
  • roles and duties
  • dominance and supremacy
  • rules and regulations
Answer: rules and regulations
Q25 | If the price of an inferior good falls, its demand: [CPO SI 2003]
  • rises
  • falls
  • remains constant
  • can be any of the above
Answer: remains constant
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