Economics · General Awareness

Fiscal Policy and Government Budget

1,104 Questions

Fiscal policy and government budget questions evaluate your knowledge of economic stabilization, public expenditure, and deficit management. These topics are crucial for civil services and banking examinations. Practice these questions to master macroeconomic principles.

Budget deficitsFiscal policy toolsGovernment expenditureExpansionary fiscal policyPublic debt benefits

Fiscal Policy and Government Budget Questions

Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

Expenditure made by the government on the purchase of goods and services on current services of factors of production is called _________________.

  1. government direct expenditure

  2. private direct expenditure

  3. government expenditure

  4. total expenditure
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Government direct expenditure refers to the government's spending on goods, services, and factors of production to provide public services.

Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

Public expenditure can be classified as ________________.

  1. Direct and transfer expenditure

  2. Developmental and non-developmental expenditure

  3. Productive and non-productive expenditure

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Public expenditure is multifaceted and can be categorized in various ways, including developmental vs. non-developmental, productive vs. non-productive, and direct vs. transfer payments.

Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

Deficit budget means _____.

  1. the government spends more than its revenue

  2. the government earns more than its expenses

  3. the government imports more than its exports

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A budget deficit is an indicator of financial health in which expenditures exceed revenue. The term budget deficit is most commonly used to refer to government spending rather than business or individual spending, but can be applied to all of these entities.

Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

Plan expenditure in India is met by ________.

  1. internal debt and other resources

  2. assistance from Aid India Club

  3. assistance from IMF

  4. assistance from OECD countries
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
  • India has adopted economic planning as a strategy for economic develop­ment. The expenditure incurred on the items relating to five year plans is termed as plan expenditure. Such expen­diture is incurred by the Central Government. A provision is made for such expenditure in the budget of the Central Government. Assistance given by the Central Government to the State Governments and Union Territories for plan purposes also forms part of the plan expenditure. 
Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

The excess of government's revenue expenditure over revenue receipts is known as ______.

  1. fiscal deficit

  2. primary deficit

  3. budget deficit

  4. revenue deficit
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A revenue deficit occurs when the net income generated falls short of the projected net income. This happens when the actual amount of revenue  received and/or the actual amount of expenditures do not correspond with budgeted revenue and expenditure figures. 

Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

By increasing the expenditure through a deficit budget the government tries to achieve _______.

  1. economic development

  2. savings

  3. increase in incidence of taxes

  4. regulation of prices
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Budget deficit is an indicator of financial health in which expenditures exceed revenue. It refers to government spending rather than business or individual spending and by increasing the expenditure though it, government tries to achieve economic development.

Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

The statement of estimated income and expenditure of the Government for a year is ______.

  1. public finance

  2. public expenditure

  3. planned expenditure

  4. budget
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A budget is an estimation of the revenue and expenses over a specified future period of time and is compiled and re-evaluated on a periodic basis. A surplus budget means profits are anticipated, while a balanced budget means that revenues are expected to equal expenses. A deficit budget means expenses will exceed revenues.

Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

Which of these is a productive public expenditure?

  1. Expenditure on law and order

  2. Expenditure on defense

  3. Expenditure on infrastructure development

  4. Expenditure on education
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Productive expenditure refers to spending that increases the productive capacity of the economy, such as infrastructure, which facilitates trade and production.

Multiple choice economics public expenditure public expenditure public finance and budget public finance, taxes and budget

Which of the following is not a productive public expenditure?

  1. Expenditure on defence

  2. Expenditure on infrastructure development

  3. Expenditure on setting up basic industries

  4. Expenditure to increase the welfare of the population
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Defense expenditure is generally classified as non-productive because it does not directly contribute to the production of goods and services for the economy, even though it is necessary for security.

Multiple choice history educational development in india educational development of independent india quality of population human capital formation in india

Education expenditure by the government is expressed as a percentage of _______.

  1. total government expenditure

  2. gross domestic product

  3. total revenue of government

  4. none of these
Reveal answer Fill a bubble to check yourself
A,B Correct answer
Explanation

Education expenditure is expressed as a percentage of total government expenditure/total government expenditure. It is expressed as how much of the total income is being committed to the development of education in the country. GDP is a monetary measure of the market value of goods and services produced over the year in the country or the total expenditure on goods and services over the year or government expenditure. 

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

The revenue generated by the government through internal and external loans is ___________.

  1. capital receipts

  2. non-tax revenue

  3. private revenue

  4. public revenue
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
  • The budget consists of capital receipts and capital payments. The capital receipts are loans raised by the Government from the general public and the foreign governments.