Tag: business economics and quantitative methods

Questions Related to business economics and quantitative methods

The first step in the budgetary process is ________________.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. Execution of the Budget

  2. Parliamentary control over finance

  3. Preparation of the budget

  4. Enactment of the budget

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Correct Option: C
Explanation:

The first step in the budgeting process is having a written strategic plan. This ensures that organizational resources are used to support the strategy and development of the organization. It means budgeting toward the vision

_____________ economists believed that the policy of balanced budget may not always be suitable for the economy.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. Classical

  2. Modern

  3. Neo-classical

  4. None of the above

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Correct Option: A
Explanation:
The classical economist advocated and proposed the concept of balanced where according to them, a balanced budget refers to a budget where the government expenditure and government revenue are equal and there is no surplus budget or deficit budget in the economy. They believed that for some types of economies the policy of balanced budget may not be suitable. 

The concept of balanced budget has been advocated by the _____________ economists.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. classical

  2. Keynesian

  3. modern

  4. none of the above

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Correct Option: A
Explanation:

The classical economist advocated and proposed the concept of balanced where according to them, a balanced budget refers to a budget where the government expenditure and government revenue are equal and there is no surplus budget or deficit budget in the economy.

The budget which has gaps between the government revenue and public expenditure is termed as the ___________ budget.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. balanced

  2. unbalanced

  3. constant

  4. none of the above

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Correct Option: B
Explanation:

Unbalanced budget is the type of budget where government expenditure is not equal to government revenue. These includes 

 (i) Surplus Budget: In this type of budget, government revenue is greater than government expenditure due to which there is a surplus in the budget. 

 (ii) Deficit budget: In this type of budget, government expenditure is greater than government revenue due to which there is a deficit in the budget. 

The classical economists considered the balanced budget to be neutral in its effects on the economy.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. True

  2. False

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Correct Option: A
Explanation:
The classical economist advocated and proposed the concept of balanced where according to them, a balanced budget refers to a budget where the government expenditure and government revenue are equal and there is no surplus budget or deficit budget in the economy. Therefore, the effect of budget remains neutral on the economy. 

When the estimated government receipts are more than the estimated government expenditure, the budget is known to be a ___________ budget.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. surplus

  2. balanced

  3. deficit

  4. zero-based

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Correct Option: A
Explanation:

Surplus Budget is the type of budget where the expected government revenue is greater than expected government expenditure due to which there is a surplus in the budget. Surplus budget is regarded as a positive indicator for the economy. 

What are ways that can be used by the government to correct inflationary gap using surplus budget?

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. Reduction in taxes

  2. Increase in tax rates

  3. Reduction in public expenditure

  4. Both B & C

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Correct Option: D
Explanation:
Surplus Budget is the type of budget where the expected government revenue is greater than expected government expenditure due to which there is a surplus in the budget. Surplus budget is regarded as a positive indicator for the economy as it can be used during inflation through increased revenue receipts by increasing taxes or through reduction in revenue expenditure by reducing public expenditure that can soak liquidity from the economy and decrease the purchasing power that results in fall of effective demand in the economy.

_____________ budget includes receipts of the government through tax and non-tax sources and that expenditure which doesn't affect the assets and liabilities of the government.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. Revenue

  2. Capital

  3. Both A & B

  4. Neither A nor B

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Correct Option: A
Explanation:

Revenue budget are the money receipts or payments that does not lead to decrease or increase in the value of asset and liability of the government.  It usually includes the tax and non tax receipts of the government and the public services expenditure of the government. 


A __________ budget is useful during periods of high inflation.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. deficit

  2. balanced

  3. suprlus

  4. zero-based

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Correct Option: C
Explanation:

Surplus Budget is the type of budget where the expected government revenue is greater than expected government expenditure due to which there is a surplus in the budget. Surplus budget is regarded as a positive indicator for the economy as it can be used during inflation through increased revenue that can soak liquidity from the economy and decrease the purchasing power. 

A deficit budget leads to an increase in the liability of the government or a decrease in its reserves.

business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

  1. True

  2. False

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Correct Option: A
Explanation:

Deficit budget is the type of budget where the estimated government expenditure is greater than the estimated government revenue due to which there is a deficit in the budget. Deficit budget is usually regarded as a negative indicator for the economy as it increases the liability of the government or decreases the reserves of the government.