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This set of Indian Economy Multiple Choice Questions & Answers (MCQs) focuses on Fiscal System of India Set 2

Q1 | The existence of a Parallel Economy or Black Money: [CPO SI 2003]
  • makes the economy more competitive
  • makes the monetary policies less effective
  • ensures a better distribution of income and wealth
  • ensures increasing productive investment
Q2 | Put the main sources of revenue of the Central Government in ascending order ofimportance: 1. Income tax 2. Corporation tax 3. Customs 4. Excise duties
  • 1, 2, 3, 4
  • 3, 2, 4, 1
  • 4, 3, 1, 2
  • 4, 3, 2, 1
Q3 | The highest sector wise contribution to gross domestic saving comes from:
  • private corporate sector
  • household sector
  • public sector
  • cooperative sector
Q4 | An amount given by a government agency or even private body to encourage aparticular economic activity is a :
  • grant
  • loan
  • subsidy
  • mutual fund
Q5 | Why has the general budget till recently always been presented at 5 o’ clock in the evening?
  • All countries present their budgets at this time
  • So that there is no time for traders to manipulate the prices
  • It is a convention of official secrecy
  • It is a carry-over from times of British rule when the Budget could be discussed in the British Payment simultaneously
Q6 | Which of the following would signify scarcity in economics?
  • Production of 100 kg of a certain item instead of the targeted 150 kg
  • Availability of 10 kg of rice against a demand for 15 kg
  • Availability of post-graduates for jobs of typists
  • Quantity supplied remains the same when price changes
Q7 | The per capita income has been low in India because:
  • of population growth
  • of price rise
  • more people are in rural areas
  • of regional imbalances
Q8 | The rate of growth of the tertiary sector has been:
  • higher than the overall rate of growth of the net domestic product
  • lower than the overall rate of growth of the net domestic product
  • same as the overall rate of growth of the net domestic product
  • fluctuating when compared to growth of net domestic product
Q9 | Since independence, both development and non-development expenditures have Increased, the increase in the former being a little more than in the other. Non development expenditure involves: 1. interest payment 2. subsidies 3. defence 4. irrigation
  • 1 and 2
  • 1 only
  • 1, 2 and 3
  • 2, 3 and 4
Q10 | Which among the following formulates fiscal policy?
  • RBI
  • Finance Ministry
  • SEBI
  • Planning Commission
Q11 | Which among the following is the regulatory authority for giving clearance for External Commercial borrowing?
  • Foreign Investment Promotion Board
  • RBI
  • SEBI
  • Foreign Investment Promotion Council
Q12 | The Zero Base Budgeting in India was first experimented from:
  • April, 1987
  • April, 2000
  • April, 1991
  • None of these
Q13 | The prices at which the government purchases food grains for maintaining the public distribution system and for building up buffer stocks are known as :
  • Minimum Support Prices
  • Procurement Prices
  • Issue Prices
  • Ceiling Prices
Q14 | Who is the chairman of 13th Finance Commission?
  • C. Rangarajan
  • M.N. Vohra
  • Bimal Jalan
  • Vijay Kelkar
Q15 | 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]
  • 5%
  • 4%
  • 2%
  • No customs duty
Q16 | 'Balanced Growth' means:
  • growth which brings about a balance between the rich and the poor
  • growth which brings about a balance between the public and private sectors
  • growth which brings about a balance between the traditional and modern sector
  • growth pattern on which simultaneous investments are made in all the sectors of the economy, viz., Agriculture, Industry, Transport, Communication, etc.
Q17 | Increase in Oil Pool Deficit implies:
  • increasing gap between international and domestic oil prices
  • domestic oil price is comparatively more than international price
  • government's Fiscal Deficit goes up
  • none of these
Q18 | Dear Money Policy implies:
  • high price level
  • large money supply
  • high production
  • high interest rates
Q19 | Which of the following is wrongly matched:
  • share market-stock exchange
  • interest rate-fiscal policy
  • export subsidy-fiscal policy
  • general price index-inflation
Q20 | Railway Budget in India was separated from general budget in :
  • 1924-25
  • 1941-42
  • 1947-48
  • 1950-51
Q21 | In recent years the capital outlays for the defence service have been:
  • increasing steadily
  • more or less constant
  • going down steeply
  • fluctuating frequently
Q22 | Which one of the following is the most important item of non-plan expenditure?
  • Interest payment
  • Defence
  • Fertiliser subsidies
  • Loans to public enterprises
Q23 | Which among the following is true? 1. Decrease in cash reserve ratio injects higher liquidity in the system 2. Higher liquidity in the system may soften interest rates 3. Higher market borrowing by the government leads to rise in interest rates Choose your answer from:
  • 1 and 2
  • 1 and 3
  • 2 and 3
  • 1, 2 and 3
Q24 | One of the problems in calculating the national income in India correctly is : [Railways 1994]
  • under-er-employment
  • inflation
  • non-monetised consumption
  • low savings
Q25 | India's progress has been reasonably satisfactory in connection with:
  • growth of per capita income
  • reduction in inequalities
  • reduction of unemployment
  • growth of GNP