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Class 12 Economics (Macro Economics) Chapter 5 Government Budget And The Economy Quiz 8 (25 MCQs)

Quiz Instructions

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1. Fill in the blank:Cutting back government programmes in vital areas like agriculture, education, health, poverty alleviation, etc. would ..... affect the economy.

Correct Answer: A) Adversely.

2. Identify which of the following statement is true?

Correct Answer: D) Fiscal deficit is the sum of primary deficit and interest payment.

3. Which type of Budget occurs when the total expenditure of the government is less than the total receipts?

Correct Answer: D) Surplus Budget.

4. According to the text, what is the effect of a decrease in taxes on the propensity to consume?

Correct Answer: A) A decrease in taxes works in effect like an increase in propensity to consume.

5. What is an economy called in which there is both the private sector and the Government?

Correct Answer: A) Mixed economy.

6. Identify the revenue receipts from the following

Correct Answer: D) Interest received on loans.

7. The capital account of the government budget is also called the .....

Correct Answer: A) Capital budget.

8. 'Policies of surplus budget during inflation' is a part of which objective of government budget

Correct Answer: B) Economic stability.

9. Budget is presented by

Correct Answer: D) Finance Minister.

10. What is one objective of the Government Budget?

Correct Answer: C) To allocate resources according to priorities.

11. Fill in the blank:Public goods, as distinct from private goods, are collectively .....

Correct Answer: A) Consumed.

12. ..... is the difference between total receipts and total expenditure:

Correct Answer: A) Fiscal Deficit.

13. What does the term 'budget deficit' mean?

Correct Answer: A) A budget deficit occurs when expenditure exceeds revenue.

14. According to the passage, what is Ricardian equivalence?

Correct Answer: A) The idea that government borrowing and taxation are equivalent means of financing expenditure.

15. Which one of the following is not a capital expenditure?

Correct Answer: D) Tax receipts.

16. Which of the following best describes a progressive tax system?

Correct Answer: A) Tax rates increase as income increases.

17. If primary deficit is 3000 and interest payment is 400, then fiscal deficit is

Correct Answer: A) 3400.

18. Tax revenue of the government includes

Correct Answer: D) All of these.

19. Govt. budget is related to which of following period ..... ?

Correct Answer: D) All of these.

20. According to the text, budget documents classify total expenditure into ..... and ..... expenditure.

Correct Answer: A) Plan; non-plan.

21. What is a revenue deficit?

Correct Answer: C) Excess of revenue expenditure over revenue receipts.

22. Which of the following is a no-tax receipt?

Correct Answer: C) Donations.

23. Fill in the blankFiscal deficit-Primary deficit =

Correct Answer: D) Interest payments.

24. A direct tax is a tax that is imposed on which of the following?

Correct Answer: D) Individuals and Corporations.

25. What is the Government Budget?

Correct Answer: D) A statement of estimated receipts and expenditures.

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