Tag: government budget and taxation

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Questions Related to government budget and taxation

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

The budget where the government revenue is equal to the government expenditure is termed as ___________.

  1. balanced budget

  2. unbalanced budget

  3. constant budget

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

Budget is an statement of the estimates of the government receipts and government expenditure during the period of the financial year. Balanced Budget is the type of budget where government expenditure is equal to government revenue.

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

The classical economists believed that the government can rescue the people in times of economic distortions through unbalanced budgets.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

False. 

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. According to them, government could rescue the people in times of distortions through balanced budgets. 

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

The budgetary process in India involves _____________ different operations.

  1. three

  2. four

  3. two

  4. five
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In India, the Union Budget is prepared by the Department of Economic Affairs of Ministry of Finance. The budget has four stages viz., 

(1) estimates of expenditures and revenues, 
(2) first estimate of deficit, 
(3) narrowing of deficit and 
(4) presentation and approval of budget. 
The process begins with various ministries providing initial estimates of plan and non-plan expenditures.

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

The first step in the budgetary process is ________________.

  1. Execution of the Budget

  2. Parliamentary control over finance

  3. Preparation of the budget

  4. Enactment of the budget
Reveal answer Fill a bubble to check yourself
C Correct answer
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

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

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

  1. Classical

  2. Modern

  3. Neo-classical

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
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. 
Multiple choice business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

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

  1. classical

  2. Keynesian

  3. modern

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

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

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

  1. balanced

  2. unbalanced

  3. constant

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

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

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

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
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. 
Multiple choice business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

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

  1. surplus

  2. balanced

  3. deficit

  4. zero-based
Reveal answer Fill a bubble to check yourself
A Correct answer
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. 

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

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

  1. Reduction in taxes

  2. Increase in tax rates

  3. Reduction in public expenditure

  4. Both B & C
Reveal answer Fill a bubble to check yourself
D Correct answer
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.