FISCAL SYSTEM MCQS SET 21

FISCAL SYSTEM MCQS SET 21

201) CENVAT is associated with:
A) rate of indirect tax
B) rate of income tax
C) rate of direct tax
D) none of the above
Answer: rate of indirect tax

   
202) Taxation and the government's expenditure policy are dealt under the :
A) trade policy
B) budget
C) fiscal policy
D) monetary policy
Answer: fiscal policy

   
203) The Sukhamaya Chakravarty committee reviews the working of:
A) India's trade policy
B) Indian Fiscal policy
C) India's monetary policy
D) India's industrial policy resolution
Answer: India's monetary policy

   
204) Deficit financing leads to inflation in general but it can be checked if:
A) government expenditure leads to increase in aggregate supply in ratio of aggregate demand
B) aggregate demand is increased only
C) all the expenditure is denoted national debt payment only
D) all the above
Answer: government expenditure leads to increase in aggregate supply in ratio of aggregate demand
 
   
205) What is fiscal policy or budgetary policy?
A) It is an outline of the results of last financial year compared with the previous budget estimate
B) It is a government forecast of receipts, payment and loan for the next year
C) It is the use of taxation, public expenditure and the management of public debt
D) It is the proposed changes in the taxation only
Answer: It is the use of taxation, public expenditure and the management of public debt


206) Value-added tax is:
A) an ad valorem tax on domestic final consumption collected at all stages between production and the point of final sale
B) an ad valorem tax on final consumption collected at the manufacturing level
C) tax on final consumption collected at the consumption stage
D) a special tax levised by states on products from other states
Answer: an ad valorem tax on domestic final consumption collected at all stages between production and the point of final sale
 
   
207) What is the main source of revenue to meet different expenditures?
A) Excise duties
B) Customs duties
C) Internal borrowings
D) Income tax
Answer: Internal borrowings

   
208) Which one of the following statement regarding the levying, collecting and distribution of
Income Tax is correct?
A) The Union levies, collects and distributes that proceeds of income tax between itself and the states
B) The Union levies, collects and keeps all the proceeds of income tax to itself
C) The Union levies and collects the tax but all the proceeds are distributed among the states
D) Only the surcharge levied on income tax is shared between the Union and the States
Answer: The Union levies, collects and distributes that proceeds of income tax between itself and the states


   
209) Which of the following is the most likely reason why total income tends to fluctuate?
A) People adjust to changing incomes by changing saving habits
B) Consumption is not always a constant fraction of income
C) Many savings and investment decisions are taken by different people
D) Consumption habits often undergo dramatic changes
Answer: Many savings and investment decisions are taken by different people
 
   
210) The largest contribution in India's National Income is from:
A) primary sector
B) secondary sector
C) tertiary sector
D) any of the above
Answer: tertiary sector