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Class 12 Economics (Macro Economics) Chapter 5 Government Budget And The Economy Quiz 1 (25 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. Capital expenditure increases the liabilities of the government.

Correct Answer: B) False.

2. Which one of them is an Indirect tax

Correct Answer: B) Excise Duty.

3. Disinvestment by government means

Correct Answer: B) Selling of shares of public enterprises held by it.

4. Which of the following is a characteristic of public goods?

Correct Answer: A) Non-rivalrous.

5. What is the fiscal year considered in the context of the government budget?

Correct Answer: B) 1st April to 31st March.

6. Which type of expenditure is made in bridge construction?

Correct Answer: A) Capital exp.

7. If increase in income leads to reduction in tax rate, such types og tax system is know as .....

Correct Answer: A) Regressive.

8. Fill in the blank:The government also receives money by way of loans or from the sale of its assets. Loans will have to be returned to the agencies from which they have been borrowed. Thus they create .....

Correct Answer: A) Liability.

9. Which statement(s) is/are correct regarding revenue expenditure?

Correct Answer: A) They do not create assets.

10. Which of the following is the component of a budget?

Correct Answer: C) Both of these.

11. What is the formula for calculating revenue deficit?

Correct Answer: B) Revenue deficit = Revenue expenditure-Revenue receipts.

12. Primary deficit in a government budget is .....

Correct Answer: D) Fiscal deficit-interest payment.

13. How does a Surplus Budget impact the economy?

Correct Answer: B) It indicates a healthy financial position of the government.

14. Which of the following is an indirect tax?

Correct Answer: B) Value Added tax.

15. Which of the following is a characteristic of revenue receipts?

Correct Answer: C) They do not reduce government assets.

16. Which one of the following is a part of capital expenditure?

Correct Answer: B) Expenditure on construction of roads.

17. Which of the following is a capital receipt

Correct Answer: C) Sale of shares of a public sector undertaking to Reliance Industries.

18. Which of the following is NOT a component of revenue receipts? Choose the correct option.

Correct Answer: B) Sale of shares in Public Sector Undertakings.

19. The expenditure which do not create assets for the government is called

Correct Answer: A) Revenue expenditure.

20. Fill in the blank:Proportional taxes reduce the autonomous expenditure multiplier because taxes reduce the marginal propensity to ..... out of income.

Correct Answer: A) Consume.

21. Which statement(s) is/are correct regarding capital receipts?

Correct Answer: D) They reduce assets and (or) create liability.

22. Revenue earned by government from the property without any legal heir is called;

Correct Answer: B) Escheat.

23. Which of the following are the objectives of government budget?

Correct Answer: D) All of these.

24. Which of the following are capital receipts of the Government?

Correct Answer: D) All of these.

25. Loans to state governments and union territories are a part of

Correct Answer: C) Capital Expenditure.

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