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Chapter 2 | PUBLIC FINANCE IN INDIA
Budget, Deficit Financin & Government Subsidies
1. Which one of the following is a development expenditure?
(a) Irrigation expenditure
(b) Administration
(c) Debt services
(d) Grant-in-aid
2. Which of the following is not an example of economic overheads?
(a) Schools
(b) Sanitary facilities
(c) Roads and Railways
(d) Coal mines
3. Development expenditure of the Central government does not include
(a) defence expenditure
(b) expenditure on economic services
(c) expenditure on social and community services
(d) grant to states
4. Which of following statement is true about the Primary deficit?
(a) It is difference between Revenue Receipts and Revenue Expenditure
(b) It is difference between Capital Receipts and Interest Payment
(c) It is difference between the Fiscal Deficit and Interest Payment
(d) It is addition of Fiscal Deficit and Interest Payment
5. Consider the following statements in regard to Zero Base Budgeting (ZBB) :
(1) Existing Government programmes can be discarded under ZBB if they are found to be outdated.
(2) ZBB is difficult to be applied to Human Development programmes as the outcome of such programme is intangible in nature.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
6. Which of the following are correct in regard to the austerity measures taken by a country going through adverse economy conditions:
(1) These measures include a reduction in spending.
(2) These measures include an increase in tax
(3) These measures include reduction in budget deficit.
Select the correct answer using the codes given below :
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
7. Which of the following is not a part of India’s National Debt?
(a) National Savings Certificates
(b) Dated Government Securities
(c) Provident Funds
(d) Life Insurance Policies
8. Which of the following will not contribute to a higher current account deficit?
(1) Increase in price of crude oil
(2) Rise in export of software services
(3) Rise in import of services
Choose the correct answer using the codes given below:
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1 and 3 only
9. Consider the following :
1. Market borrowing
2. Treasury bills
3. Special securities issued to RBI
Which of these is/are components of internal debt?
(a) 1 only
(b) 1 and 2
(c) 2 only
(d) 1, 2 and 3
10. In India, deficit financing is used for raising resources for:
1. redemption of public debt
2. adjusting the balance of payments
3. reducing the foreign debt
4. economic development
Which of the above statements is/are correct ?
(a) 4 only
(b) None of the above
(c) 2 and 3 only
(d) 1 and 2 only
11. Deficit financing leads to inflation in general, but it can be checked if:
(a) government expenditure leads to increase in the aggregate supply in ratio of aggregate demand
(b) only aggregate demand is increased (c) all the expenditure is denoted national debt payment only
(d) All of the above
(... To be Continue...)
