Tag: public finance and budget

Quizzes (7) Questions (140)

Questions Related to public finance and budget

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

Which of the following is/are the adverse effects of deficit financing ______.

  1. reduction in prices

  2. inflation

  3. inequality

  4. both B and C
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Deficit financing, when excessive, increases the money supply, which leads to inflation. It can also exacerbate economic inequality by disproportionately affecting those with fixed incomes while benefiting asset holders.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

The full form of FRBM Act 2003 is _______.

  1. Fiscal Regulation and Budget Management Act

  2. Fiscal Regulation and Banking Management Act

  3. Fiscal Responsibility and Budget Management Act

  4. Financial Responsibility and Budget Management Act
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The Fiscal Responsibility and Budget Management Act, 2003 (FRBMA) is an Act of the Parliament of India to institutionalize financial discipline, reduce India's fiscal deficit, improve macroeconomic management and the overall management of the public funds by moving towards a balanced budget.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

The term fiscal federalism was introduced by _______.

  1. Dalton

  2. Seligman

  3. Musgrave

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Fiscal federalism, financial relations between units of governments in a federal government system. Fiscal federalism is part of broader public finance discipline. The term was introduced by the German-born American economist Richard Musgrave in 1959.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

The difference between total expenditure and total receipts except loans and other liabilities is called ______.

  1. fiscal deficit

  2. budget deficit

  3. primary deficit

  4. revenue deficit
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Fiscal deficit refers to the excess of total expenditure over total receipts (excluding borrowings) during the given fiscal year. Fiscal Deficit = Total Expenditure – Total Receipts excluding borrowings. The extent of fiscal deficit is an indication of how far the government is spending beyond its means.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

Study of income and expenditure of government at state, central and local levels is called ______.

  1. marketing

  2. public financing

  3. socio-economic study

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

Public finance is the study of the role of the government in the economy. It is the branch of economics which assesses the government revenue and expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

The difference between fiscal deficit and interest payment during the year is called ______.

  1. fiscal deficit

  2. budget deficit

  3. primary deficit

  4. revenue deficit
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Primary deficit is one of the parts of fiscal deficit. While fiscal deficit is the difference between total revenue and expenditure, primary deficit can be arrived by deducting interest payment from fiscal deficit. Interest payment is the payment that a government makes on its borrowings to the creditors.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

What is the role of government in public finance?

  1. Promotion of human capital accumulation

  2. Decentralisation

  3. Provision of essential public goods

  4. All the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Public finance involves the government's role in promoting human capital, ensuring decentralization of resources, and providing essential public goods that the private market may under-provide.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

What are the features of Fiscal Responsibility and Budget Management Act, (FRBMA) 2003? 

  1. To reduce fiscal deficit to not more than 3 percent of GDP

  2. To ensure greater transparency in fiscal operations.

  3. To eliminate the revenue deficit by March 31, 2009

  4. All the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The FRBMA is an act which institutionalizes and regulates financial discipline and help manage public funds in order to strengthen India's fiscal position. The purpose of FRBMA was to reduce fiscal deficit. 

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

Borrowing from all the sides like net borrowing from RBI and from abroad gives _______.

  1. fiscal deficit

  2. budget deficit

  3. primary deficit

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

The budget deficit is the difference between current government's spending on goods and services and total current revenue from all types of taxes net of transfer payments. So when borrowing is done from RBI or other sources, that creates the budget deficit.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

The difference between total expenditure and total receipts except loans and other liabilities is called _______.

  1. fiscal deficit

  2. budget deficit

  3. primary deficit

  4. revenue deficit
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The fiscal deficit is the primary deficit plus interest payments on the debt. Therefore, if refers to the difference in total expenditure and total receipts without loan and other liability.