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Indian Economy > Two > Flashcards

Two Flashcards

1
Q

List the functions of a government in an economy.

A

Allocation, Distribution and Stabilization

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2
Q

Which type of goods cannot be provided by the market mechanism?

A

Public Goods

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3
Q

The benefits of which type of goods are available to all?

A

Public Goods

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4
Q

In which type of goods can a person be excluded from the benefits if he does not pay for the good?

A

Private Goods

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5
Q

Public Goods suffer from which problem?

A

Free Rider Problem

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6
Q

The government attempts to bring out a Distribution of income which is considered fair by the society. Which function of the government is this?

A

Distribution

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7
Q

The government affects the personal disposable income of households through?

A

Transfer payments and collecting taxes

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8
Q

Overall level of employment and prices in an economy depend upon the?

A

aggregate level of demand

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9
Q

Through the Stabilization function, the government tries to raise/reign in the level of?

A

Aggregate Demand

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10
Q

Which article of the Constitution mandates the presentation of an annual financial statement before the Parliament?

A

Art 112

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11
Q

Which article of the Constitution mandates the presentation of an annual financial statement before the Legislature by the State Government?

A

Art 202

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12
Q

The budget is a statement of?

A

The account of the government

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13
Q

Railway budget was separated from the general budget in _____ on the recommendations of ______.

A

1921, Acworth Committee

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14
Q

What are the two major components of the General Budget?

A

Revenue budget and capital budget

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15
Q

List the 3 sets of figures contained in the General Budget.

A

Actual Figure of previous year. Budget and revised figure for the current year. Budget estimate for the upcoming year.

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16
Q

Budget estimate for the upcoming year is based on?

A

previous two year estimates

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17
Q

List the funds into which the estimated receipts and expenditures of the government are made?

A

Consolidated Fund of India, Public Accounts of India, Contingency Fund of India

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18
Q

Which article of the Constitution defines the Consolidated Fund of India?

A

Art 266(1)

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19
Q

All receipts received by the GOI are put into the?

A

Consolidated Fund of India

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20
Q

All loans raised by the GOI by issue of Treasury bills, loans or ways and means advances are put into?

A

Consolidated Fund of India

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21
Q

All moneys received by the GOI in repayment of loans are put into?

A

Consolidated Fund of India

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22
Q

All expenses incurred by the GOI in repayment of loans given to the State Government/UT is spent from which Fund?

A

Consolidated Fund of India

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23
Q

The Public Account of India is defined in which article of the Constitution?

A

Art 266(2)

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24
Q

All public money received other than those included in the Consolidated Fund of India are held in?

A

Public Account of India

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25
Q

Money raised by the GOI through small saving schemes, provident fund schemes is put into the?

A

Public Account of India

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26
Q

The Public Account of India contains both receipts and liabilities. True or False?

A

True

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27
Q

Which article of the Constitution defines the Contingency Fund of India?

A

Art 267

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28
Q

The Contingency Fund of India is held at the disposal of?

A

The President

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29
Q

The Contingency Fund of India is used to meet?

A

unforeseen expenditure

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30
Q

The President can meet unforeseen expenditure from the Contingency Fund of India without the approval of the Parliament. True or False.

A

True. The Parliament can approve the expenditure at a later date.

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31
Q

Revenue is a subset of _____.

A

Receipts

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32
Q

Revenue is a ______ transaction.

A

one way

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33
Q

Salary received by a person is included in?

A

Revenue

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34
Q

______ include both one way and two way transactions.

A

Receipts

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35
Q

Loan taken by a person is included in?

A

Receipts. Because it has to be repaid by him.

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36
Q

Salary received by a person is both revenue and ______.

A

receipt

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37
Q

The ______ shows the current receipts of the government and the expenditure that can be met from these receipts.

A

Revenue Budget

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38
Q

Those receipts which need not be paid again to the payee by the GOI are called?

A

Revenue Receipts

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39
Q

What are three divisions of Revenue Receipts?

A

Tax Revenues, Non Tax Revenues and Other Non Tax Receipts

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40
Q

______ consist of the proceeds of the taxes and other duties levied by the central government.

A

Tax Revenues

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41
Q

Tax Revenues comprise of?

A

Direct Taxes, Indirect Taxes and Taxes of Union Territories

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42
Q

Taxes which directly fall on firms and individuals are called?

A

Direct Taxes

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43
Q

Examples of direct taxes are?

A

Income Tax, Corporation Tax, Wealth Tax, Gift Tax.

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44
Q

Which Taxes are called Paper Taxes?

A

Wealth and Gift Taxes

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45
Q

Examples of Indirect Taxes are?

A

Excise Tax, Customs duties and Service Tax

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46
Q

Duty levied on goods produced within the country is called?

A

Excise duty

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47
Q

Taxes imposed in goods imported into and exported out of India are called?

A

Customs Duties

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48
Q

Tax on services consumed by individuals and firms is called?

A

Service Tax

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49
Q

Non Tax Revenues consist of?

A

Interest receipts and dividends and profits

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50
Q

Interest earned on account of loans given by the GOI is called?

A

Interest Receipt

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51
Q

Profit earned from the circulation of currency and coins falls under which section of the Budget?

A

Other Non Tax Receipts

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52
Q

Profit is the difference between the _____ and the cost incurred to produce the currency note or coin.

A

face value

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53
Q

Cash Grants-in-aid received by the GOI from foreign countries and international organizations fall under which section of the Budget?

A

Other Non Tax Receipts

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54
Q

Which expenditure will not yield any revenue in the future?

A

Revenue Expenditure

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55
Q

Which expenditure is a one-way payment?

A

Revenue Expenditure

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56
Q

Which expenditure consists of all those expenditures which do not result in creation of physical or financial assets?

A

Revenue Expenditure

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57
Q

The Capital Account is an account if the ______ of the GOI.

A

Assets and Liabilities

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58
Q

Capital receipts are essentially _____ transactions.

A

two-way

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59
Q

Loans raised by the GOI from the public, market borrowings fall under?

A

Capital Receipts

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60
Q

Borrowings by the GOI from RBI and SCB and other financial institutions through the sale of G-Secs, T-Bills fall under?

A

Capital Receipts

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61
Q

Loans received from foreign governments and international organizations fall under?

A

Capital Receipts

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62
Q

Small Savings and Provident Funds are listed in which section of the Budget?

A

Capital Receipts

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63
Q

Net receipts received from the sale of share in PSUs falls under?

A

Capital Receipts

64
Q

Which expenditure made by the GOI creates permanent assets and yields periodical income?

A

Capital Expenditure

65
Q

Expenditure on the acquisition of land, buildings, machinery, equipment falls under?

A

Capital Expenditure

66
Q

Loans and advances by the GOI to the States and UT falls under?

A

Capital Expenditure

67
Q

Expand FRBM

A

Fiscal Responsibility and Budget Management

68
Q

The FRBM Act was enacted in?

A

2003

69
Q

List the three policy statements mandated by the FRBM Act to be presented along with the budget.

A

Medium Term Fiscal Policy Statement. Fiscal Policy Strategy Statement. Macroeconomic Framework Statement.

70
Q

Which policy statement mandated by the FRBM Act sets a 3 year rolling target for specific fiscal indicators

A

Medium Term Fiscal Policy Statement

71
Q

Which policy statement mandated by the FRBM Act sets the priorities of the GOI in the fiscal area?

A

fiscal policy strategy statement

72
Q

Which Policy Statement mandated by the FRBM Act examines whether revenue expenditure can be finance through revenue receipts on a sustainable basis?

A

medium term fiscal policy statement

73
Q

which policy statement mandated by the fiscal responsibility and budget management act examines current policies and justifies any deviation in fiscal policy measures?

A

fiscal policy strategy statement

74
Q

which policy statement mandated by the fiscal responsibility and budget management act assesses the prospects of the economy with respect to GDP growth rate fiscal balance of the government and external balance?

A

macroeconomic Framework statement

75
Q

the gap between receipts and expenditure is called

A

deficit

76
Q

the difference between total expenditure and total receipts is called

A

budget deficit

77
Q

budget deficit is always

A

zero

78
Q

the excess of government revenue expenditure over revenue receipts is called

A

revenue deficit

79
Q

Which deficit includes only such transactions that affect the current income and expenditure of the government?

A

revenue deficit

80
Q

what forces the government to eventually cut revenue expenditure

A

revenue deficit

81
Q

reduction in productive capital expenditure or welfare expenditure results in

A

lower growth and adverse welfare implications

82
Q

the difference between government’s total expenditure and its total receipts excluding borrowings and other liabilities is called

A

fiscal deficit

83
Q

the amount of borrowings and other liabilities of the government is called

A

fiscal deficit

84
Q

those receipts which are not borrowings and therefore do not give rise to debt are called?

A

non debt creating capital receipts

85
Q

recovery of loans and proceeds from the sale of public sector units are examples of

A

non debt creating capital receipts

86
Q

fiscal deficit has to be financed through

A

borrowing

87
Q

which deficit indicates the total borrowing requirements of the government from all sources

A

fiscal deficit

88
Q

the difference between fiscal deficit and net interest liabilities of the government is called

A

primary deficit

89
Q

interest payments made by the government minus interest receipts received by the government constitute

A

net interest liabilities

90
Q

the exercise to translate the status gender commitments of the government into budgetary commitments is called

A

gender budgeting

91
Q

which type of budgeting involves special initiatives for empowering women

A

gender budgeting

92
Q

an examination of the impact of public expenditure and policies of the government on women is made through

A

gender budgeting

93
Q

according to keynes Government fiscal policy should be used to

A

stabilize the level of output and employment

94
Q

which type of Income Tax acts as an automatic stablizer?

A

proportional income tax

95
Q

proportional Income Tax makes the disposable income and consumer spending _______ to fluctuations in GDP

A

less sensitive

96
Q

deliberate actions taken to stabilize the economy constitute

A

discretionary fiscal policy

97
Q

in what ways maybe budgetary deficits financed

A

borrowing, taxation or printing money

98
Q

By ______, the government transfers the burden of reduced consumption on future generations

A

borrowing

99
Q

performance and programme budgeting was introduced in India in

A

1968 for 4 Ministries and in 1975 76 for all developmental departments

100
Q

in which budget The Chosen programs or projects are subjected to the test of actual performance against their expected standards

A

performance and programme budgeting

101
Q

which budget establishes a correlation between physical output and financial input aspects of each program and activity

A

performance and programme budgeting

102
Q

what refers to the benefits that arise out of physical output from respective financial inputs

A

outcome

103
Q

the first outcome budget was introduced in

A

2005

104
Q

which budget involves considering that there are no existing schemes and the budget has to be started from scratch or zero base

A

zero based budgeting

105
Q

which budget involves critical review and rejustification of the inclusion of schemes to be included in the budget

A

zero based budgeting

106
Q

______ is a compulsory levy payable by an economic unit to the government without any corresponding entitlement to receive a definite and direct quid pro quo from the government

A

Tax

107
Q

_____ is the legal description of the object with reference to which Tax is payable

A

tax base

108
Q

Tax base of excise duty is

A

production of commodities

109
Q

tax base of income tax is

A

income of the individual

110
Q

what is the measure of actual or observed change in tax revenue relative to GDP

A

tax buoyancy

111
Q

proportionate change in tax revenue without any discretionary change relative to GDP is called

A

tax elasticity

112
Q

tax revenue calculated after setting aside the change in tax revenue due to discretionary change in GDP is called

A

adjusted tax revenue

113
Q

tax levied as a percentage of tax base irrespective of the size of the tax base at a uniform rate is called

A

proportional tax

114
Q

tax rate increases with increase in size of tax base in

A

progressive taxation

115
Q

______ helps to ensure economic equality in the society

A

progressive taxation

116
Q

taxation in which the percentage of tax as well as the absolute amount of tax increases with increase in tax base is called

A

progressive taxation

117
Q

method of taxation in which tax rate decreases with increase in size of tax base but the absolute amount of tax increases with increase in size of tax base is called

A

regressive taxation

118
Q

The _____ of tax is on the first point of contact of tax with the taxpayers

A

impact

119
Q

The _____ of tax is on the final resting place of tax

A

incidence

120
Q

______ of tax is on those who cannot pass on the burden of tax to others

A

incidence

121
Q

_____ are those taxes where the impact and incidence of tax is on the same economic unit

A

direct taxes

122
Q

_____ are those taxes where the impact of tax is on 1 economic unit and the incidence is on another

A

indirect taxes

123
Q

if tax is levied as a percentage of the value of goods irrespective of the number of goods produced or sold or imported it is called

A

ad valorem taxation

124
Q

in ad valorem taxation, revenue increases with

A

rise in price

125
Q

if tax is levied as flat rate per unit of good regardless of the number or value of the good then it is called

A

specific duty

126
Q

tax sharing between the centre and States is governed by

A

80 and 88 Constitutional Amendment acts

127
Q

which taxes were not shareable between the centre and the States before the 80th Constitutional Amendment Act

A

corporate tax

128
Q

The 80th Constitutional Amendment Act was enacted on the recommendations of?

A

10th Finance Commission

129
Q

under which article of the constitution do all taxes and duties referred in the union list except taxes under article 268 and article 269, surcharge, cess become sharable?

A

article 270

130
Q

stamp duties and excise duties on toilet and medicinal purposes come under which article in the constitution

A

article 268

131
Q

taxes under article 268 are levied by

A

the Government of India

132
Q

taxes under article 268 are collected and appropriated by

A

the states

133
Q

which taxes come under article 269

A

interstate sale and purchase, interstate consignment

134
Q

taxes under article 269 are levied and collected by

A

the Government of India

135
Q

taxes under article 269 are shared by the

A

States only

136
Q

which article of the constitution provides provision to enact act law in state subjects by parliament on the request of legislatures of two or more States

A

article 252

137
Q

the arrangement under article 252 where any tax coming under the states’ domain can be handed over to the parliament is called

A

rental arrangement

138
Q

which article of the Constitution deals with service tax

A

article 268(a)

139
Q

under article 268(a) service tax can be levied by

A

Government of India only

140
Q

service tax has been introduced by which constitutional amendment

A

88 Constitutional Amendment Act

141
Q

which article of the constitution allows the Parliament to make laws to impose tax and duties even though not in union list in case of an emergency

A

article 358 b

142
Q

which article of the Constitution allows the President to change provisions of articles from 268 to 279 during an emergency

A

article 354

143
Q

tax additionally levied as a percentage of existing Tax amount or as a percentage of the value of goods and services or as a fixed amount of quantity of goods for a specific purpose is called

A

cess

144
Q

tax additionally levied as a percentage of existing Tax amount without any specific purpose is called

A

surcharge

145
Q

______ is levied if the size of the tax base exceeds a certain threshold limit.

A

surcharge

146
Q

duty levied by importing countries on imported goods to raise the price of the subsidised product is called

A

countervailing duty

147
Q

_______ refers to selling goods in foreign country at price lower than the price of home country

A

Price Dumping

148
Q

______ refers to selling goods in foreign country at a price lower than the cost of production

A

cost dumping

149
Q

_____ is mainly aimed at wiping out the domestic producers from the market

A

Cost Dumping

150
Q

cost damping is also called

A

predatory dumping

151
Q

duty imposed on dumped goods is called

A

anti dumping duty

152
Q

countervailing duty is imposed to balance the lower cost because of

A

subsidy

153
Q

anti dumping duty is imposed to counter ______ capture market

A

voluntary low cost

154
Q

_______ says that at lower as well as higher rate of tax, tax revenue is low but tax revenue is high at optimal rate of tax

A

laffer curve

155
Q

according to laffer curve, tax revenue is low at higher tax rate because

A

tax evasion is high

156
Q

_________ argues that taxation and borrowing are equivalent means of Financing deficit

A

ricardian equivalence

Indian Economy (2 decks)

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