Tag: public finance, budget and fiscal policy

Questions Related to public finance, budget and fiscal policy

From ________ onwards, India experienced adverse BOP.

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

  1. 1979-80

  2. 1980-81

  3. 1978-79

  4. 1985-86

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Correct Option: A

Balance of payment on current account covers all receipts on account of earnings, borrowings and all payments on account of spending and lending. (true/false)

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

  1. True

  2. False

  3. Cant say

  4. None of above

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Correct Option: B

In 1990-91, BOP position worsened because of ________.

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

  1. Gulf war

  2. deterioration in invisible remittances

  3. both above

  4. none of above

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Correct Option: C

___________ is the difference between total receipts and total expenditure.

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

  1. Fiscal deficit

  2. Budget deficit

  3. Revenue deficit

  4. Capital deficit

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Correct Option: B
Explanation:

Budget deficit refers to the shortfall of revenues in comparison to the government expenditure. It can be measured as the difference between Total Receipts and Total Expenditure.

Which of the following is not reserved for public sector:

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

  1. Railway

  2. Atomic

  3. Defence

  4. None of these

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Correct Option: C

What is Privatisation?

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

  1. It refers to the disposal of public sectors equity in the market

  2. It refers to the transfer of assets from public to private sector ownership

  3. It means integrating the domestic economy with the world economy

  4. None of the above

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Correct Option: B

What is the budgetary deficit?

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

  1. It is the difference between all receipts and expenditure.

  2. It is the difference between all expenditure and receipts.

  3. The difference between government loans and credits recovered.

  4. Government assets and liabilities.

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Correct Option: A

In India, deficit can be financed by _________.

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

  1. borrowing from the RBI

  2. borrowing from the commercial banks

  3. issue of new currency

  4. all of the above

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Correct Option: D

Deficit financing means financing of _________.

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

  1. public expenditure which is in excess of public revenue

  2. public revenue which is in excess of public expenditure

  3. both (a) and (b)

  4. none of the above

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Correct Option: A

What does an increase in the ratio of revenue deficit to gross fiscal deficit indicate?

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

  1. An increase in investment

  2. An increase in the utilisation of borrowed funds for revenue purposes

  3. An increase in the utilisation of borrowed funds for imports

  4. An increase in the utilisation of borrowed funds for lending

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Correct Option: B
Explanation:

$Revenue\ deficit:$ Revenue expenditure of the Central Govt is composed of plan and non-plan expenditure of the Government and is met out of revenue receipts. In case of a gap in the revenue receipts and revenue expenditure, where the expenditure is on the higher side, there exists a revenue deficit which is financed from borrowed funds.


$Fiscal\ deficit$ is the sum of budgetary deficit and the borrowed liabilities of the government for deficit financing. It indicates the total deficit of the fiscal policy. 

An increase in the ratio of revenue deficit to gross fiscal deficit would indicate higher revenue deficit, which requires use of deficit financing/borrowing for the purpose of revenue expenditure, i.e, into those avenues which would not generate any productive returns in the future.