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Class 12 Economics (Macro Economics) Chapter 5 Government Budget And The Economy Quiz 6 (25 MCQs)

Quiz Instructions

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1. Which type of Budget occurs when the total expenditure of the government is equal to the total receipts?

Correct Answer: A) Balanced Budget.

2. What is the formula for the tax multiplier?

Correct Answer: A) -c / (1-c).

3. Tax that imposed on value added at the various stages of production is known as

Correct Answer: C) Value added tax.

4. What is the primary purpose of a government budget?

Correct Answer: B) To show planned receipts and payments.

5. Fill in the blank:The formula for the change in income ($\Delta$Y) when there is a change in government expenditure ($\Delta$G) is given by $\Delta$Y = .....

Correct Answer: A) $\Delta$Y = 1 / [1-c(1-t)] $\Delta$G.

6. The same fiscal measures can give rise to a large or small deficit, depending on which factor?

Correct Answer: A) The state of the economy.

7. Budget speech in Lok Sabha is given by:

Correct Answer: C) Finance Minister.

8. Receipts which do not affect asset or liability status of the govt.

Correct Answer: A) Revenue receipts.

9. What does fiscal deficit indicate?

Correct Answer: D) Total borrowing requirements of the government.

10. Which of the following is a component of Capital Expenditures in the Government Budget?

Correct Answer: A) Expenditure on acquiring land for road and constructing building.

11. Fill in the blank:If some private savers decide to buy government bonds, the funds remaining to be invested in private hands will be .....

Correct Answer: A) Smaller.

12. Which of the following is not a Revenue Receipt?

Correct Answer: A) Recovery of loans.

13. Which of the following statements is true according to the passage?

Correct Answer: B) GST is a single comprehensive indirect tax.

14. What does the term 'Government Budget' refer to?

Correct Answer: D) Estimation of total receipts and total expenditure of the government for the next fiscal year.

15. Primary deficit indicates the government's inability to meet its regular and recurring expenditure.

Correct Answer: B) False.

16. Fill in the blank:The main items of non-plan expenditure are interest payments, defence services, subsidies, salaries and .....

Correct Answer: A) Pensions.

17. Which function of the government budget aims to reduce income inequality?

Correct Answer: A) Re-distribution of Income.

18. Which is included in the direct tax?

Correct Answer: C) Both of these.

19. What is the primary objective of the government budget regarding economic growth?

Correct Answer: C) To mobilize resources for investment.

20. The budget may include:

Correct Answer: D) All of these.

21. Public goods are non-excludable and non-rivalrous.

Correct Answer: A) True.

22. Repayment of loan is an example of:

Correct Answer: A) Capital expenditure.

23. How many types of revenue receipts are there?

Correct Answer: A) 2.

24. What does non-plan expenditure refer to?

Correct Answer: B) Expenditure on routine government functions.

25. Which is the component of budget receipts?

Correct Answer: C) Both of these.

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