What is the main objective of fiscal policy?
a) Economic growth
b) Price stability
c) Employment generation
d) All of the above
Answer: d) All of the above
2. The revenue received by the government through taxes and other sources is called:
a) Capital revenue
b) Budgetary deficit
c) Public revenue
d) Public expenditure
Answer: c) Public revenue
3. Which of the following is a direct tax?
a) Sales tax
b) Excise duty
c) Income tax
d) Custom duty
Answer: c) Income tax
4. The difference between total revenue and total expenditure of the government is known as:
a) Budget deficit
b) Fiscal deficit
c) Revenue deficit
d) Capital deficit
Answer: b) Fiscal deficit
5. Which of the following is NOT a type of budget?
a) Surplus budget
b) Deficit budget
c) Balanced budget
d) Monetary budget
Answer: d) Monetary budget
6. Public debt refers to:
a) The loans taken by the government
b) The expenditure incurred by the government
c) The income of private individuals
d) The total tax collection
Answer: a) The loans taken by the government
7. The tax imposed on goods and services is known as:
a) Direct tax
b) Indirect tax
c) Income tax
d) Wealth tax
Answer: b) Indirect tax
8. A progressive tax system means:
a) Higher tax rates for higher income groups
b) Uniform tax rates for all income groups
c) Lower tax rates for higher income groups
d) No tax for higher income groups
Answer: a) Higher tax rates for higher income groups
9. Deficit financing is used by the government to:
a) Control inflation
b) Increase employment
c) Cover budget deficit
d) Reduce imports
Answer: c) Cover budget deficit
10. The primary source of revenue for the central government is:
a) Income tax
b) Excise duty
c) Customs duty
d) Goods and Services Tax (GST)
Answer: d) Goods and Services Tax (GST)
11. Public expenditure mainly aims at:
a) Economic development
b) Price stabilization
c) Reducing unemployment
d) All of the above
Answer: d) All of the above
12. The principle of taxation that states the rich should pay more than the poor is called:
a) Ability to pay principle
b) Benefit principle
c) Equity principle
d) Proportional taxation
Answer: a) Ability to pay principle
13. Which of the following is NOT a source of public revenue?
a) Taxes
b) Fees
c) Borrowings
d) Grants
Answer: c) Borrowings
14. Which tax is considered regressive in nature?
a) Income tax
b) Property tax
c) Sales tax
d) Corporate tax
Answer: c) Sales tax
15. Fiscal policy is implemented by:
a) Reserve Bank of India
b) Ministry of Finance
c) NITI Aayog
d) State Governments
Answer: b) Ministry of Finance
16. The government imposes taxes for:
a) Raising revenue
b) Controlling inflation
c) Reducing inequality
d) All of the above
Answer: d) All of the above
17. The burden of an indirect tax falls mainly on:
a) The seller
b) The government
c) The consumer
d) The manufacturer
Answer: c) The consumer
18. Which of the following is NOT a feature of a good tax system?
a) Simplicity
b) Equity
c) Complexity
d) Economic efficiency
Answer: c) Complexity
19. The largest component of government expenditure in India is on:
a) Defense
b) Education
c) Infrastructure
d) Interest payments
Answer: d) Interest payments
20. The term ‘budgetary deficit’ refers to:
a) Excess of total expenditure over total revenue
b) Excess of revenue deficit over fiscal deficit
c) Shortfall of planned expenditure
d) None of the above
Answer: a) Excess of total expenditure over total revenue