Fiscal Policy and Government Budget

It is correct. The word 'Fisc' means state treasury, and fiscal policy refers to the policy concerning the use of state treasury or the government finance to achieve the macroeconomic goals.

It is not an instrument of fiscal policy, but of monetary policy. The monetary policy is concerned with the regulation of money in the hands of public. The bank rate is increased, and hence the interest on loan is increased and people are discouraged to take loan as they have to pay more interest on loan. Hence, it controls money in the hands of public.

It is not considered by fiscal policy. The regulation of money supply is considered by monetary policy, not fiscal policy. The money supply in the hands of public is regulated by instruments like increasing bank rate, open market operations etc. which is considered by monetary policy, not fiscal policy.

It is by adopting deficit financing. When deficit financing is resorted, the government has to issue new currency notes to meet the deficit. When the new currency notes are issued, it increases supply of money in the market as compared to demand. Therefore, the price increases, and the value of rupee decreases.

It is not an objective of deficit financing. When the deficit financing is adopted, the new currency notes are issued and it leaves more cash in the hands of people. Thus, people demand and consume more, and this pushes up prices. Therefore, reducing inflation is not the objective of deficit financing. In fact, it is resorted to for overcoming depression.

Yes, it's the correct choice. Performance budget is prepared by all the ministries dealing with development activities.

A Budget Deficit is the excess of spending over income for a government, corporation, or individual over a particular period of time. The opposite of a deficit is a surplus. Fiscal deficit is noticed when government's total expenditures exceed the revenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits. Fiscal deficit is regarded as a positive economic event by some economists like Keynes.

‘Equally ________ problem’ means both the fillers need to represent words of intensity and seriousness. Option (4) contains very simple, but most appropriate words to fill the blanks. 

Yes, Seigniorage is the profit earned by the government by issuing currency. It is the profit earned on the difference between face value of currency and its production cost. For instance, if the cost of production of a ten rupee coin is 50 paisa and its face value is Rs 10, then a profit of Rs 9.50 is earned on it.

A budget deficit occurs when government expenditure exceeds receipts. In economic terminology, when expenditure > receipts, the deficit is recorded as a positive value (the size of the deficit). For example, if receipts are 100 and expenditure is 120, the deficit is 20 (positive), not negative. The deficit represents how much the government must borrow.

James Buchanan argued that the primary burden of public debt is NOT shifted to future generations if debt finances current consumption rather than public investment. The 'burden' falls on current taxpayers who feel the impact of reduced private consumption as government borrowing crowds out private investment. The Reason statement is also false - debt can be serviced through various means beyond taxing future generations.

Revenue budgets cover items of recurring nature such as taxes, interest payments, salaries, and maintenance expenses. These are regular, annual expenditures. Capital budgets, in contrast, cover one-time or long-term investments in assets like infrastructure, equipment, and buildings that provide benefits over multiple years.

It is not included in public finance. Attracting foreign direct investment is not included in public finance. It is included in international policy, as it deals with foreign countries.