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 business economics and quantitative methods government budget and economy consumer's budget public finance indifference curve

Excess of total expenditure over total receipts is known as __________.

  1. budgetary deficit

  2. revenue deficit

  3. fiscal deficit

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

Budgetary deficit also known as government deficit refers to a situation when the budget expenditure of the government are greater than the budget revenue of the government due to which the expenses exceed the revenue. 

Multiple choice civics public health and the government role of the government in health food security and related aspects food security

The government plan its expenditure making a clear statement on the amount of money it is going to spend on public facilities. This statement is called what?

  1. Statement of expenditure

  2. Government budget

  3. Draft

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A government budget is the annual financial statement that outlines the government's estimated receipts and expenditures for the upcoming fiscal year.

Multiple choice history economic system and economic policies american dominance, neo-imperialism and new economic policy insights on lpg changing economic policies

Some of the economic policies of Government are?

  1. Industrial policy

  2. Fiscal policy

  3. Tariff policy

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Economic policies of Government are formed for maintaining the stability of the economy. They are also formed to ensure economic development. Some of the economic policies of Government are:

1) Industrial policy which is required to control the function of industries in a country.

2) Fiscal policy is formed to maintain the money flow in the economy.

3) Tariff Policy is formed to check the tax and tariff obtained from the trade in the economy.
Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

The income of the government through all sources is called public _________.

  1. money

  2. income

  3. debt

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

Public revenue refers to the income generated by the government through various sources such as taxes, fees, and profits from public enterprises.

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

Indian financial system has provisions for the transfer of resources from the center to the states; the important means of resource transfer are _________________.

  1. devolution from the central taxes

  2. grant-in-aids for different purposes

  3. loans of short and long term periods

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

The Indian financial system transfers resources to states through multiple channels, including tax devolution, grants-in-aid, and various loan facilities.

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

Which is the most significant factor of revenue expenditure of Central Government?

  1. Defence expenditure

  2. Subsidy

  3. Interest payment

  4. Salaries of employees
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Revenue Budget consists of the revenue receipts of Government and the expenditure met from these revenues. An expenditure which neither creates assets nor reduces liability is called Revenue Expenditure. The various types of the expenditure on the revenue amount according as their importance are:

(1) Interest payments on public debit,

(2) Civil administration,

(3) Defense,

(4) Subsidies on food, fertilizers, exports and

(5) Social services such as education, health, etc.

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

'Deficit Financing' means _________.

  1. relying on foreign aid

  2. spending by borrowing from abroad

  3. not spending enough to ensure development

  4. spending in excess of revenues
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Deficit financing, practice in which a government spends more money than it receives as revenue, the difference is filled up by borrowing or printing new currency.

Multiple choice economics emerging issues in indian economy industrial development in india need and growth of industrialisation secondary sector : industry

Which of the following is a Developmental Expenditure of the Government?

  1. Salary and Allowances for Defence Personnel, Police

  2. Improvement in Telecommunications Network

  3. Subsidies

  4. Maintenance of Law and Order
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Developmental expenditure refers to spending that contributes to the economic growth and infrastructure of a country. Improving telecommunications is a direct investment in infrastructure.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

Which of these is a source of savings for Government?

  1. Tax and Fees Collections

  2. Profits of PSUs

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Government savings are derived from the difference between its revenue and its consumption expenditure. Revenue sources include tax collections, fees, and the profits generated by public sector undertakings (PSUs).

Multiple choice infrastructure in india infrastructure tertiary sector economics

Deficit financing contributed to ___________________.

  1. $8.6%$ of public sector outlay in $8th$ plan
  2. $66%$ of public sector outlay in $8th$ plan
  3. $46%$ of public sector outlay in $8th$ plan

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

Deficit financing was a significant component of the funding for the 8th Five-Year Plan, accounting for 8.6 percent of the public sector outlay.

Multiple choice infrastructure in india infrastructure tertiary sector economics

Which of the following is a Non-Developmental Expenditure of the Government?

  1. Production of Energy

  2. Construction of Roads

  3. Expansion of Railway Network

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

Developmental expenditure contributes to capital formation and economic growth (like infrastructure). Subsidies are generally classified as non-developmental or transfer payments as they do not directly create assets.

Multiple choice

A plan that shows how much money you have and how you will spend it

  1. Treasure map

  2. Hoard

  3. Budget

  4. Widget
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A budget is an estimation of revenue and expenses over a specified future period of time, used to plan spending. A hoard is a hidden store of money or valued objects, and a widget is a placeholder name for a manufactured item.

Multiple choice

What is the primary tool of fiscal policy?

  1. Government spending

  2. Taxation

  3. Transfer payments

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

Fiscal policy utilizes government spending, taxation, and transfer payments to influence the economy.