Tag: government budget and economy

Questions Related to government budget and economy

Pick out the item which is not a part of the plan expenditure.

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. Agriculture

  2. Industry

  3. Social Services

  4. Defence

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Correct Option: D
Explanation:

Plan expenditure is essentially the budget support to the Central Plan and the Central assistance to State and Union Territory plans. Like all budget heads, this is also split into revenue and capital components. Defense is not part of plan expenditure.

Capital expenditure is categorised as ________.

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. planned

  2. unplanned

  3. both A and B

  4. none of the above

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Correct Option: C
Explanation:

Any expenditure that is incurred on programmes which are detailed to state for their plans is called planned expenditure. The estimated expenditure provided in the budget for spending during the year on routine functioning of the government is unplanned expenditure. So capital expenditure comprises both.

The difference between total expenditure and total receipts is ______.

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. fiscal deficit

  2. budget deficit

  3. primary deficit

  4. revenue deficit

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Correct Option: B
Explanation:

The budget deficit is the difference between current government's spending on goods and services and total current revenue from all types of taxes net of transfer payments.

The fiscal deficit of central government according to 2012-2013 as percent of GDP was _______.

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. 4.9%

  2. 4.8%

  3. 4.7%

  4. 4.5%

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Correct Option: A

Capital account of the government consists of _______.

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. capital receipts

  2. capital expenditure

  3. both A and B

  4. none of the above

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Correct Option: C

Gross fiscal deficit is calculated by subtracting which of the following from total expenditure ________.

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. revenue receipts

  2. non-debt capital receipts

  3. both A and B

  4. none of the above

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Correct Option: C

Which of the following is the most comprehensive measure of budgetary imbalances? 

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. Fiscal deficit

  2. Revenue deficit

  3. Primary deficit

  4. All of the above

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Correct Option: A
Explanation:

The extent of fiscal deficit is an indication of how far the government is spending beyond its means.

Which of the following is/are the adverse effects of deficit financing ______.

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. reduction in prices

  2. inflation

  3. inequality

  4. both B and C

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Correct Option: D

The full form of FRBM Act 2003 is _______.

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. Fiscal Regulation and Budget Management Act

  2. Fiscal Regulation and Banking Management Act

  3. Fiscal Responsibility and Budget Management Act

  4. Financial Responsibility and Budget Management Act

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Correct Option: C
Explanation:

The Fiscal Responsibility and Budget Management Act, 2003 (FRBMA) is an Act of the Parliament of India to institutionalize financial discipline, reduce India's fiscal deficit, improve macroeconomic management and the overall management of the public funds by moving towards a balanced budget.

The term fiscal federalism was introduced by _______.

economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

  1. Dalton

  2. Seligman

  3. Musgrave

  4. None of the above

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Correct Option: C
Explanation:

Fiscal federalism, financial relations between units of governments in a federal government system. Fiscal federalism is part of broader public finance discipline. The term was introduced by the German-born American economist Richard Musgrave in 1959.