FISCAL SYSTEM MCQS SET 20

FISCAL SYSTEM MCQS SET 20

191) Estimation of national income in India is difficult due to :
I. illiteracy of people
II. non-monetised consumption
III. inflation
IV. people holding multiple jobs
A) I, II, III and IV
B) II and III
C) I and IV
D) I, II and IV
Answer: I, II and IV
 
   
192) The annual financial statement shows the receipts and payments of the government under the 3 parts in which government accounts are kept in :
1. Consolidated Fund
2. Contingency Fund
3. Public Account
Which of the following items are covered under the Public Account?
A) All revenue received by the government
B) Loans raised by the government
C) Funds placed at the disposal of the President
D) Transactions relating to provident fund, small savings. etc.
Answer: Transactions relating to provident fund, small savings. etc.
 
   
193) 'Liquidity trap' is a situation in which:
A) people want to hold only cash because prices are falling everyday
B) people want to hold only cash because there is too much of liquidity in the economy
C) the rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash
D) there is an excess of foreign exchange reserves in the economy leading to excess of money supply
Answer: the rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash
 
   
194) Consider the following:
1. Market Borrowing
2. Treasury Bills
3. Special Securities to the RBI
Which of these is/are components of internal debt of the government?
A) 1 only
B) 1 and 2
C) 1 and 3
D) 1, 2 and 3
Answer: 1, 2 and 3

   
195) Match the following:
List I       List II
A. Boom       1. Business activity at a high level with increasing income, output and employment at macro level
B. Recession       2. Gradual fall in income, output and employment with business activity in a low gear
C. Recovery       3. Unprecedented level of unemployment and drastic fall in income and output
D. Depression      4. Steady rise in the general price level and income, output and employment
Below codes are given in A B C D order
A) 1 2 4 3
B) 1 2 3 4
C) 2 1 4 3
D) 2 1 3 4
Answer: 1 2 4 3


196) MODVAT is different from VAT in the sense that:
1. under MODVAT, tax is levied only on value addition while under VAT, excise is imposed on final value and then rebate is given on inputs
2. MODVAT is only at the production stage while VAT extends both to production and distribution stage
3. under MODVAT, excise is levied on final value and then rebate is given on inputs while under VAT, tax is levied only on value addition
4. MODVAT implies rationalization of excise duty only while VAT implies rationalization of excise, sales and turnover taxes etc. also
Choose correct answer from:
A) 1,2 and 4
B) 1,3 and 4
C) 2,3 and 4
D) 1,2,3 and 4
Answer: 2,3 and 4

   
197) Consider the following taxes:
1. Corporation Tax
2. Value Added Tax
3. Wealth Tax
4. Import duty
Which of these is/are Indirect taxes?
A) 1 only
B) 2 and 4
C) 1 and 3
D) 1, 2 and 4
Answer: 2 and 4
 
   
198) The tax whose share in overall taxation revenue has gone up rapidly during the planning
period is :
A) income tax
B) wealth tax
C) capital gains tax
D) tax on production
Answer: tax on production
 
   
199) The most appropriate measure of a country's economic growth is the:
A) gross domestic product
B) net domestic product
C) net national product
D) per capita real income
Answer: per capita real income
 
   
200) When the ratio of indirect taxes to total taxation revenue is very high, it leads to :
1. rise in the price level
2. higher taxation burden on the rich
3. higher taxation burden on the poor
4. fall in tax revenues
A) 1 and 2
B) 1 and 3
C) 1,2 and 4
D) 1,3 and 4
Answer: 1 and 3