Budget

Question 1

A receipt that does not create a liability or reduce an asset.

Answer 1

Revenue receipt

Question 2

Profits are a form of

Answer 2

Non tax revenue receipts

Question 3

Penalty imposed by court for non compliance of orders

Answer 3

Forfeitures

Question 4

Recovery of loans is a capital expenditure- true or false

Answer 4

False- it is a capital receipt

Question 5

Non recurring expenses of the government that adds to the capital stock of the economy.

Answer 5

Capital expenditure

Question 6

Payment of salaries to staff of government hospitals is a

Answer 6

Revenue expenditure

Question 7

Revenue deficit can be beneficial for a country- true or false

Answer 7

False

Question 8

If the borrowings of the government are Rs 23 lakhs and Primary deficit is Rs 10 lakhs, what is the fiscal deficit?

Answer 8

Rs 23 lakhs

Question 9

A tax where the impact and incidence lie on the same individual.

Answer 9

Direct tax

Question 10

Does a revenue deficit necessarily imply a fiscal deficit?

Answer 10

No

Question 11

An expenditure that does not lead to an increase in assets or a decrease in liabilities.

Answer 11

Revenue expenditure

Question 12

Why are National Savings certificates treated as a capital receipt?

Answer 12

They lead to an increase liabilities

Question 13

Recovery of loans is a capital receipt because

Answer 13

It leads to a decrease in assets

Question 14

When the government gives a grant to another government it is a form of _____________expenditure.

Answer 14

Revenue

Question 15

Claim of the government on the property of a person who dies without leaving a legal heir.

Answer 15

Escheat

Question 16

GST is a form of ___________tax

Answer 16

Indirect

Question 17

Progressive taxation is used to reduce ____________in the economy

Answer 17

Inequalities

Question 18

Should the government increase or decrease its expenditure during deflation to bring stability?

Answer 18

Increase

Question 19

What should the government do to the tax rate to discourage consumption of tobacco?

Answer 19

Increase it

Question 20

Should the government remove subsidies granted to Khadi products to increase their consumption?

Answer 20

No

Question 21

Why is Entertainment tax an indirect tax?

Answer 21

Because its burden can be transferred

Question 22

Why is sale of a PSU a capital receipt?

Answer 22

Because it leads to a decrease in assets

Question 23

What kind of expenditure is repayment of loan? Why?

Answer 23

Capital- leads to decrease in liabilities

Question 24

Why does borrowing increase the revenue deficit?

Answer 24

Because it increases revenue expenditure in the form of interest payments.

Question 25

If primary deficit is Rs 12000 crores and interest payments are Rs 7000 crores, what is the fiscal deficit?

Answer 25

Rs 19000 crores

Question 26

If revenue expenditure is Rs 70000, borrowings are Rs 15000, revenue receipts are Rs 50000 and interest payments are 25% of revenue deficit, calculate fiscal deficit and primary deficit.

Answer 26

Fiscal deficit =Rs 15000 | Primary deficit =Rs 10000