Tag: government budget and taxation

Questions Related to government budget and taxation

Budget expenditure refers to the estimated expenditure of the government during a given fiscal year.

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:

Budget expenditure refers to the overall expenditure done by the government in the economy during a given period of financial year. It has two components 

1. Revenue expenditure are all such types of government expenditure that does not create any assets for the government or does not cause any reduction in the liability of the government. 
2. Capital expenditure - Capital expenditure are all those expenditure of the government that either creates an asset for the government or reduce the liability of the government. For example - Expenditure on land and building, purchase of shares etc.

Which of the following is a component of the capital receipts 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. Borrowings

  2. Disinvestment

  3. Recovery of loans

  4. All of the above

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Correct Option: D
Explanation:

Capital receipts are all those money receipts of the government that either creates a liability for the government or reduce an asset of the government. Therefore, capital receipts includes borrowings, disinvestment and recovery of loans. 

Taxes levied on personal income, profits of the corporate, wealth and property is termed as ________ tax.

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

  1. indirect

  2. service tax

  3. direct

  4. none of the above

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Correct Option: C
Explanation:

Direct tax are the tax where the final burden of the tax is borne by the person on whom it is imposed. These taxes are directly paid by the person on whom it is imposed to the government. For example- income tax, corporate tax etc. 

Which among the following is a source of non-tax revenue for the government?

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

  1. Gifts and grants

  2. Fees, fines and penalties

  3. Interest and dividend on investments

  4. All of the above

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Correct Option: D
Explanation:

Non-tax receipts of the government are all those revenue receipts of the government that is not a part of tax receipts of the government be it a direct tax or indirect tax. For example - fees, fines, escheats, gifts and grants, interest and dividends on investment, etc. 

____________ refers to all those revenue receipts of the government which are not a part of the tax receipts.

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

  1. Taxable revenue

  2. Non-tax revenue

  3. Revenue from disinvestment

  4. All of the above

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Correct Option: B
Explanation:

Non tax receipts of the government are all those revenue receipts of the government that is not a part of tax receipts of the government be it is direct tax or indirect tax. For example - fees, fines, escheats, etc. 

__________ receipts are those monetary receipts which either creates a liability or leads to a reduction in the assets 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. Tax

  4. Non-tax

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Correct Option: B
Explanation:

Capital receipts are all those money receipts of the government that either creates a liability for the government or reduce an asset of the government. Therefore, capital receipts include small savings, market loans and provident funds.

The expenditure incurred by the government which is out of the scope of government plans due to calamities is termed as __________.

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

  1. plan expenditure

  2. capital expenditure

  3. non-plan expenditure

  4. non-development expenditure

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Correct Option: C
Explanation:

Non planned expenditure are those government expenditure that are incurred on the non planned projects of the government. All the expenditure incurred by the government on projects after five years of plans are considered as non planned expenditure. 

Expenditure incurred by the government for the provision of essential services like judiciary, defence, and administration is termed as ____________.

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

  1. plan expenditure

  2. non-development expenditure

  3. non-plan expenditure

  4. development expenditure

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Correct Option: B
Explanation:
The government expenditures incurred on activities that are directly related to or results in some economic and social development of the country such as infrastructural improvement are called developmental expenditures.

_________ expenditure refers to the expenditure incurred by the government on various programmes in the plan.

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

  1. Plan

  2. Non-plan

  3. Development

  4. Non-development

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Correct Option: A
Explanation:

Plan expenditure refers to the expenditure that the government spends upon the planned programs. These plans usually have a five years duration and any expenditure above this period is not considered as planned expenditure. 

____________ expenditure is incurred for the smooth functioning of the government departments and its various services.

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

  1. Capital

  2. Development

  3. Revenue

  4. Plan

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Correct Option: C
Explanation:

Revenue expenditure are all such types of government expenditure that does not create any assets for the government or does not cause any reduction in the liability of the government. These expenditures are mainly conducted to provide smooth functioning of government activities and related services.