Economics · General Awareness

Fiscal Policy and Government Budget

1,089 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

The budgetary (the Union Budger 2011-2012) allocation for the President's household establishment has been reduced as compared to last fiscal. Which statment is correct about the above changes made by the Union Budget 2011-2012?

  1. The budgetary allocation for the President's household establishment has been reduced by 30 per cent as compared to last fiscal.

  2. The budgetary allocation for President's Secretariat has seen a marginal increase of 37 lakh this fiscal.

  3. The salary and allowances of the President have been left unchanged.

  4. This year (2011-2012) Rs. 22.61 crore have been allocated for the President's household establishment.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 The salary and allowances of the President have been left unchanged at Rs. 18 lakh.

Multiple choice

According to the Union Budget 2011-2012 estimations, match the Government's spending share with the application of revenue:

Application of Revenue: Share (in paise out of every rupee): A. The central plan i. 22 paise B. Interest payment ii. 18 paise C. Non-plan expenditure iii. 11 paise D. Subsidy iv. 9 paise

  1. i, ii, iii, iv

  2. iv, ii, iii, i

  3. i, iii, ii, iv

  4. iv, iii, ii, i
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 The central plan will account for 22 paise of every rupee spent.

Multiple choice

According to the Union Budget 2011-2012 estimations, match the Government Revenue share with the sources of revenue: Sources of Revenue: Share (in paise out of every rupee):

A. Collections from Corporate Tax i. 6 paise B. Income Tax Collection ii. 11 paise C. Indirect Tax Collection (except Excise Duty) iii. 24 paise D. Borrowings iv. 27 paise

  1. iii, ii, i, iv

  2. i, ii, ii, iv

  3. iii, i, ii, iv

  4. ii, iii, i, iv
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 Collections from corporate tax are estimated to be 24 paise in FY'12.

Multiple choice

Budget is also known as

  1. schedules

  2. projects

  3. numerised plan

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

A budget is a plan expressed in numerical terms, usually financial, used for planning and control.

Multiple choice

Fiscal policy is connected with

  1. public revenue and expenditure

  2. exports and imports

  3. issue of currency

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

Fiscal policy refers to the use of government spending and taxation to influence the economy. It is distinct from monetary policy, which deals with the supply of money and interest rates.

Multiple choice

Which of the following statements about austerity measures introduced by the Union Finance Ministry to curb government expenditure in September 2009 are correct? I.          Ministries and Departments were asked to cut non-plan expenditure by ten per cent in case of some expenses and five percent in case of the remaining ones II.         Ministries and Departments were asked not to hold conferences in five star hotels III.        Plan expenditure was subjected to a token one percent cut

  1. I and II only

  2. II only

  3. III and I only

  4. III only
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

II. HDFC has joint venture with Standard Life of Scotland for life insurance and Germany's ERGO for general insurance. Management control in the insurance businesses of both HDFC and ICICI Bank is in Indian hands.

Multiple choice

Fiscal policy means

  1. planning policy

  2. credit policy

  3. taxation policy

  4. policy of expenditure and public debt
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Fiscal policy refers to the use of government spending and taxation to influence the economy. It specifically involves the management of public revenue and expenditure.

Multiple choice

In 2010, the government decided to change the base year for calculating national income. Which of the following statements are correct?

I. The base year will be changed from 1999-2000 to 2004-05. II. Change in base year will lead to a higher GDP. III. Change in base year will lead to a lower fiscal deficit.

  1. I only

  2. I and II only

  3. II and III only

  4. III and I only

  5. I, II and III
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Fiscal deficit will come down to 6.41 per cent against the estimated 6.8 per cent, as GDP would be larger in the new series for calculating national income, Chief Statistician Pronab Sen informed media on February 3, 2010. In January 2010, the Government released a new series for calculating national income by changing the base year from 1999-2000 to 2004-05.