Quiz-summary
0 of 5 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
Information
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 5 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- Answered
- Review
-
Question 1 of 5
1. Question
The actual liabilities of the Union government include which of the following
- Loans taken for the recapitalisation of banks
- Borrowings by PSUs
- Capital expenditures of various Ministries.
Select the correct answer code:
Correct
Solution: a)
In addition to the borrowings by PSUs, the actual liabilities of the government would include loans taken for the recapitalisation of banks.
Capital expenditure creates assets for the government and causes reduction in liabilities for the government.
Incorrect
Solution: a)
In addition to the borrowings by PSUs, the actual liabilities of the government would include loans taken for the recapitalisation of banks.
Capital expenditure creates assets for the government and causes reduction in liabilities for the government.
-
Question 2 of 5
2. Question
The committed expenditures of the government usually includes which of the following?
- Pensions
- Interest payments
- Investment expenditures
Select the correct answer code:
Correct
Solution: c)
The expenditure of the governments from which they cannot deny (as they have already committed them to pay) are known as committed expenditures. The liabilities such as ‘interest’ (of the internal as well as external loans) and ‘pension’ (of the retired personnel of the governments) are examples of such expenditures.
Incorrect
Solution: c)
The expenditure of the governments from which they cannot deny (as they have already committed them to pay) are known as committed expenditures. The liabilities such as ‘interest’ (of the internal as well as external loans) and ‘pension’ (of the retired personnel of the governments) are examples of such expenditures.
-
Question 3 of 5
3. Question
High tax expenditure is mainly caused by
Correct
Solution: c)
Tax Expenditures, as the word might indicate, does not relate to the expenditures incurred by the Government in the collection of taxes. Rather it refers to the opportunity cost of taxing at concessional rates, or the opportunity cost of giving exemptions, deductions, rebates, deferrals credits etc. to the tax payers. Tax expenditures indicate how much more revenue could have been collected by the Government if not for such measures. In other words, it shows the extent of indirect subsidy enjoyed by the tax payers in the country.
For instance, there is a significant divergence in India between the official rates of taxes and the actual or effective rate of taxation.
This arises on account of the exemptions to the tax rate.
This is called as a high tax expenditure.
Incorrect
Solution: c)
Tax Expenditures, as the word might indicate, does not relate to the expenditures incurred by the Government in the collection of taxes. Rather it refers to the opportunity cost of taxing at concessional rates, or the opportunity cost of giving exemptions, deductions, rebates, deferrals credits etc. to the tax payers. Tax expenditures indicate how much more revenue could have been collected by the Government if not for such measures. In other words, it shows the extent of indirect subsidy enjoyed by the tax payers in the country.
For instance, there is a significant divergence in India between the official rates of taxes and the actual or effective rate of taxation.
This arises on account of the exemptions to the tax rate.
This is called as a high tax expenditure.
-
Question 4 of 5
4. Question
Printing currency is not considered a good means of deficit financing due to which of the following reasons:
- It increases inflation proportionally.
- It decreases aggregate demands.
- Decreases flow of money in the economy.
Select the correct answer code:
Correct
Solution: c)
Deficit financing
- The act/process of financing/supporting a deficit budget by a government is deficit financing. It is done by external or internal burrowing or by printing currency.
- Printing Currency is the last resort for the government in managing its deficit.
Printing fresh currencies does have other damaging effects on the economy:
- It increases inflation proportionally. (India regularly went for it since the early 1970s and usually had to bear double digit inflations).
- Printing new currency notes Increases flow of money in the economy.
- Since deficit financing raises aggregate expenditure and, hence, increases aggregate demand, the danger of inflation looms large.
Incorrect
Solution: c)
Deficit financing
- The act/process of financing/supporting a deficit budget by a government is deficit financing. It is done by external or internal burrowing or by printing currency.
- Printing Currency is the last resort for the government in managing its deficit.
Printing fresh currencies does have other damaging effects on the economy:
- It increases inflation proportionally. (India regularly went for it since the early 1970s and usually had to bear double digit inflations).
- Printing new currency notes Increases flow of money in the economy.
- Since deficit financing raises aggregate expenditure and, hence, increases aggregate demand, the danger of inflation looms large.
-
Question 5 of 5
5. Question
Additional Grant is given by the Parliament to the executive when
Correct
Solution: c)
Additional Grant: It is granted when a need has arisen during the current financial year for additional expenditure upon some new service not contemplated in the budget for that year.
Incorrect
Solution: c)
Additional Grant: It is granted when a need has arisen during the current financial year for additional expenditure upon some new service not contemplated in the budget for that year.
Join our Official Telegram Channel HERE for Motivation and Fast Updates
Subscribe to our YouTube Channel HERE to watch Motivational and New
Join our Twitter Channel HERE
Follow our Instagram Channel HERE
Follow us on LinkedIn : HERE
