MCQOPTIONS
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MCQOPTIONS
This section includes 133 Mcqs, each offering curated multiple-choice questions to sharpen your Indian Economy knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
The extent of money transfer to the States out of sharable pool of tax collection according to the 12th Finance Commission Has been fixed at |
| A. | 29.0% |
| B. | 29.5% |
| C. | 30.5% |
| D. | 32.5% |
| Answer» D. 32.5% | |
| 2. |
As compared to revenue deficit, fiscal deficit will always remain |
| A. | Higher |
| B. | Lower |
| C. | Same |
| D. | All of three |
| Answer» B. Lower | |
| 3. |
If the tax rate increases with the higher level of income, it shall be called |
| A. | Proportional Tax |
| B. | Progressive Tax |
| C. | Lump sum Tax |
| D. | Regressive Tax |
| Answer» C. Lump sum Tax | |
| 4. |
The Report of Vijay Kelkar Committee relates to |
| A. | Trade Reforms |
| B. | Centre-State Financial Relations |
| C. | Disinvestment in Public Sector Enterprises |
| D. | Tax Reforms |
| Answer» E. | |
| 5. |
Under which of the following taxes the total amount payable by an individual is limited by the Constitution? |
| A. | Corporation Tax |
| B. | Estate Tax |
| C. | Succession Duty |
| D. | Tax on profession, trade and callings |
| Answer» C. Succession Duty | |
| 6. |
Who is the Chairman of the 12th Finance Commission? |
| A. | Prof D.T. Lakarawala |
| B. | Dr.C. Rangrajan |
| C. | Shri Digvijay Sinha |
| D. | Shri K.C. Pant |
| Answer» C. Shri Digvijay Sinha | |
| 7. |
VAT is imposed |
| A. | Directly on consumer |
| B. | On final stage of the production |
| C. | On first stage of the production |
| D. | On all stages between production and final sale |
| Answer» E. | |
| 8. |
Which of the following taexs/duties is NOT under the jurisdiction of the Central Government? |
| A. | Land Revenue |
| B. | Personal Income Tax |
| C. | Corporate Income Tax |
| D. | Custom Duties |
| Answer» B. Personal Income Tax | |
| 9. |
Which one of the following is NOT a source of tax revenue in Indian States? |
| A. | Land Revenue |
| B. | Motor Vehicle Tax |
| C. | Entertainment Tax |
| D. | Corporate Tax |
| Answer» E. | |
| 10. |
Which one of the following is the most import item of expenditure of the Government of India on revenue account? |
| A. | Defence |
| B. | Subsidies |
| C. | Pensions |
| D. | Interest Payments |
| Answer» E. | |
| 11. |
With what subject is Raghuram Rajan Committee connected? |
| A. | Austerity in Government Expenditure |
| B. | Financial Sector Reforms |
| C. | Export-Import Balance |
| D. | Rising Prices |
| Answer» C. Export-Import Balance | |
| 12. |
Which one of the following is NOT the source of revenue of Central Government? |
| A. | Income Tax |
| B. | Corporate Tax |
| C. | Agriculture Income Tax |
| D. | Excise Duty |
| Answer» D. Excise Duty | |
| 13. |
Fiscal Policy is related to |
| A. | Money supply in the economy |
| B. | Regulation of the banking system |
| C. | Planning for economic development |
| D. | Government's Revenue and Expenditure |
| Answer» D. Government's Revenue and Expenditure | |
| 14. |
Which of the following is the largest single source of the Government's earning from tax revenue? |
| A. | Wealth tax |
| B. | Customs |
| C. | Income tax |
| D. | Central excise |
| Answer» E. | |
| 15. |
Which authority recommends the principles governing the grants-in-aid of the revenues of the States out of the Consolidated Fund India? |
| A. | Public Accounts Committee |
| B. | Union Ministry of Finance |
| C. | Finance Commission |
| D. | Inter-State Council |
| Answer» E. | |
| 16. |
Which among the following is the exclusive jurisdiction of the State Government? |
| A. | Corporation Tax |
| B. | Custom Duty |
| C. | Sales Tax |
| D. | Income Tax |
| Answer» D. Income Tax | |
| 17. |
The Indian Income Tax is |
| A. | Direct and proportional |
| B. | Indirect and proportional |
| C. | Direct and progressive |
| D. | Indirect and progressive |
| Answer» D. Indirect and progressive | |
| 18. |
Which one of the following is NOT a feature of 'Value Added Tax' (VAT)? |
| A. | It is a multi-point destination-based system of taxation |
| B. | It is fax levied on value addition at each stage of transaction in the production- distribution chain |
| C. | It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer |
| D. | It is basically a subject of the Central Government and the State Government are only a facilitator for its successful implementation |
| Answer» E. | |
| 19. |
From the following which one is NOT a tool of Fiscal Policy? |
| A. | Taxation |
| B. | Public Expenditure |
| C. | Interest Rate |
| D. | Public Debt |
| Answer» D. Public Debt | |
| 20. |
If interest payments are subtracted from Gross Fiscal Deficit, the residuary will be |
| A. | Gross Primary Deficit |
| B. | Budgetary Deficit |
| C. | Monetized Deficit |
| D. | Revenue Deficit |
| Answer» B. Budgetary Deficit | |
| 21. |
Fiscal Deficit is |
| A. | Total expenditure-Total receipts |
| B. | Revenue expenditure-Revenue receipts |
| C. | Capital expenditure-Capital receipt-Borrowings |
| D. | Sum of budget deficit and Government's market borrowings and Liabilities |
| Answer» E. | |
| 22. |
Which one of the following group of taxes collected by the Central Government and shared with the States? |
| A. | Income Tax, Corporate Tax, Custom Duty |
| B. | Income Tax, Corporate Tax, Excise Duty |
| C. | Excise Duty, Cess on Income, Corporate Tax |
| D. | Excise Duty, Cess on Income, Custom Duty |
| Answer» C. Excise Duty, Cess on Income, Corporate Tax | |
| 23. |
Which one of the following forms the largest share of deficit in Government of India budget |
| A. | Primary deficit |
| B. | Revenue deficit |
| C. | Budgetary deficit |
| D. | Fiscal deficit |
| Answer» E. | |
| 24. |
Which one of the following taxes is leveid and collected by the Union but distrubuted between Union and States? |
| A. | Corporation Tax |
| B. | Tax on income other than on agricultural income |
| C. | Tax on railway fares and freights |
| D. | Custos |
| Answer» C. Tax on railway fares and freights | |
| 25. |
Finance Commission is constituted |
| A. | every year |
| B. | once in two years |
| C. | once in four years |
| D. | once in five years |
| Answer» E. | |
| 26. |
Ficsal deficit is |
| A. | total income less Government borrowing |
| B. | total payments less total receipts |
| C. | total payments less capital receipts |
| D. | total expenditure less total receipts excluding borrowing |
| Answer» E. | |
| 27. |
Consider the following statements : In India, stamp duties on financial transactions are1. leavied and collected by the State Government2. appropriated by the Union GovernmentWhich of these statements is/are correct? |
| A. | Only 1 |
| B. | Only 2 |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» C. Both 1 and 2 | |
| 28. |
As we all know Government of India collects tax revenue on various activities in the country. Which of the following is a part of the tax revenue of the Government?1. Tax on Income2. Tax one Expenditure 3. Tax one Property or Capital Assets4. Tax on Goods and ServicesCodes |
| A. | Only 1 and 3 |
| B. | Only 2 and 4 |
| C. | Only 2, 3 and 4 |
| D. | All 1, 2, 3, and 4 |
| Answer» E. | |
| 29. |
Which one of the following is NOT an example of Indirect Tax? |
| A. | Sales tax |
| B. | Excise duty |
| C. | Custom duty |
| D. | Expenditure tax |
| Answer» D. Expenditure tax | |
| 30. |
MODVAT is related to |
| A. | Sales Tax |
| B. | wealth Tax |
| C. | Income Tax |
| D. | Excise Duty |
| Answer» E. | |
| 31. |
Economic Planning is in |
| A. | Union List |
| B. | State List |
| C. | Concurrent List |
| D. | not any specific list |
| Answer» D. not any specific list | |
| 32. |
Which of the following is/are function/functions of the Finance Commission of India?1. Distribution of the net proceeds of the taxes which are divisible between the revenues of the States out of the Consolidated Fund of IndiaSelect the correct answer using the code given below |
| A. | 1 Only |
| B. | 2 Only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» D. Neither 1 nor 2 | |
| 33. |
Consider the following1. Fringe Benefit tax2. Intrest tax3. Securities transaction taxWhich of the above is/are Direct tax/taxes? |
| A. | 1 only |
| B. | 1 and 3 only |
| C. | 2 and 3 only |
| D. | 1, 2 and 3 |
| Answer» E. | |
| 34. |
Which of the following is/are some of the recommendations of the Raghurajan Committee on financial sector reforms?1. Target inflation control rather than controlling money supply2. Open Corporate and Government Bond markets3. Provide liberal regulations for mergers and acquisitionsCodes |
| A. | Only 1 |
| B. | Only 2 |
| C. | Only 3 |
| D. | All 1, 2, 3 and 4 |
| Answer» E. | |
| 35. |
As we all know, Government of India pays special emphasis on the management of Fiscal Deficit. What is Fiscal Deficit? |
| A. | The gap between projected or estimated GDP and Actual GDP |
| B. | The gap between the total number and value of the currency notes issued by the RBI uptill now over the number and value of those which are in actual circulation |
| C. | The gap between the actual borrowings of the Government of India and the expected expenditure for which provision is made in the budget |
| D. | Excess of Government's disbursement comprising current and capital expenditures over its current receipts (Tax/Non-tax receipts) |
| Answer» E. | |
| 36. |
The recommendations of the Sarkaria Commission relate to |
| A. | Distribution of Revenue |
| B. | Powers and functions of the President of India |
| C. | Membership of Parliament |
| D. | Centre-State relations |
| Answer» E. | |
| 37. |
The Kelkar proposals which in the news recently were the |
| A. | recommendations for reforms in the power sector |
| B. | recommendations for tax reforms |
| C. | guidelines for the privatization of public sector undertakings |
| D. | guidelines for reducing vehicular pollution and the promoting of CNG use |
| Answer» C. guidelines for the privatization of public sector undertakings | |
| 38. |
Which one of the following is NOT a function of Finance Commission in India? |
| A. | Devolution of Income Tax |
| B. | Devolution of Excise Duty |
| C. | Award of grants-in-aid |
| D. | Devolution of Trade Tax |
| Answer» E. | |
| 39. |
Consider the following taxes:A. Corporate taxB. Customs dutyC. Wealth taxD. Excise duty |
| A. | A only |
| B. | B and D |
| C. | A and C |
| D. | B and C |
| Answer» C. A and C | |
| 40. |
The budgetary deficit in the Union Budget of India is equal to |
| A. | Revenue deficit plus capital deficit |
| B. | Revenue deficit minus capital deficit |
| C. | Revenue deficit plus capital deficit |
| D. | Fiscal deficit minus capital deficit |
| Answer» E. | |
| 41. |
When was the Wealth tax first introduced in India? |
| A. | 1948 |
| B. | 1957 |
| C. | 1976 |
| D. | 1991 |
| Answer» C. 1976 | |
| 42. |
The largest item of expenditure in the current account of the Central Government budget is |
| A. | Defence Expenditure |
| B. | Subsidies |
| C. | Interest Payments |
| D. | Expenditure on social services |
| Answer» D. Expenditure on social services | |
| 43. |
Which of the following taxes is collected by the Government on sale of goods and services in the country? |
| A. | NAT |
| B. | CET |
| C. | SAT |
| D. | VAT |
| Answer» E. | |
| 44. |
Which of the following committees examined and suggested Financial Sector Reforms? |
| A. | Abid Hussain Committee |
| B. | Bhagwati Committee |
| C. | Chelliah Committee |
| D. | Narsimhan Committee |
| Answer» D. Narsimhan Committee | |
| 45. |
The 'break-even point' is where |
| A. | Marginal revenue equals marginal cost |
| B. | Average revenue equals average cost |
| C. | Total revenue equals total cost |
| D. | None of these |
| Answer» C. Total revenue equals total cost | |
| 46. |
The latest committee to submit its report on tax reforms is known as |
| A. | Kelkar Committee |
| B. | Chellia Committee |
| C. | Narsimhan Committee |
| D. | Vaghul Committee |
| Answer» B. Chellia Committee | |
| 47. |
Which one of the following sets of sources of revenue belongs to the Union Government alone? |
| A. | Gift tax, Holding tax |
| B. | Sales tax, Income tax |
| C. | Wealth tax, Land revenue |
| D. | Custom duties, Corporation tax |
| Answer» E. | |
| 48. |
Fiscal Responsibility and Budget Management Act (FRBMA) concerns |
| A. | Fiscal deficit only |
| B. | Revenue deficit only |
| C. | Both fiscal deficit and revenue deficit |
| D. | Neither fiscal deficit nor revenue deficit |
| Answer» D. Neither fiscal deficit nor revenue deficit | |
| 49. |
Agricultural income tax assigned to the state government by |
| A. | the finance commission |
| B. | the constitution of India |
| C. | the interstate council |
| D. | the National Development council |
| Answer» C. the interstate council | |
| 50. |
Which of the following commission set up by the President of India decides the distribution of tax incomes between the Central and State Governments? |
| A. | Central Law Commission |
| B. | Pays Commission for Government Employees |
| C. | Administrative Reform Commission |
| D. | Finance Commission |
| Answer» E. | |