Tag: public finance, budget and fiscal policy

Questions Related to public finance, budget and fiscal policy

Capital account of the government consists of _______.

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

  1. capital receipts

  2. capital expenditure

  3. both A and B

  4. none of the above

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Correct Option: C

Gross fiscal deficit is calculated by subtracting which of the following from total expenditure ________.

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

  1. revenue receipts

  2. non-debt capital receipts

  3. both A and B

  4. none of the above

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Correct Option: C

Which of the following is the most comprehensive measure of budgetary imbalances? 

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. Revenue deficit

  3. Primary deficit

  4. All of the above

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Correct Option: A
Explanation:

The extent of fiscal deficit is an indication of how far the government is spending beyond its means.

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

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

  1. reduction in prices

  2. inflation

  3. inequality

  4. both B and C

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Correct Option: D

The full form of FRBM Act 2003 is _______.

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

  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

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Correct Option: C
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.

The term fiscal federalism was introduced by _______.

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

  1. Dalton

  2. Seligman

  3. Musgrave

  4. None of the above

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Correct Option: C
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.

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

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. primary deficit

  4. revenue deficit

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Correct Option: A
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.

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

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

  1. marketing

  2. public financing

  3. socio-economic study

  4. none of the above

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Correct Option: B
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.

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

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. primary deficit

  4. revenue deficit

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Correct Option: C
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.

What is the role of government in public finance?

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

  1. Promotion of human capital accumulation

  2. Decentralisation

  3. Provision of essential public goods

  4. All the above

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Correct Option: D