chapter 5

What is a fiscal deficit a key indicator of?

• a) The financial health of the public sector
  

• b) The amount of private sector loans
  

• c) The level of foreign reserves
  

• d) The government's trade policies

What is a government budget?

• a) A statement of past year expenditures
  

• b) A statement of estimated receipts and expenditures of the government
  

• c) A statement of only tax receipts
  

• d) A statement of the country's GDP

What is budgetary policy?

• a) Plans regarding only taxes
  

• b) Plans and programs of the government related to revenue and expenditure
  

• c) Plans related to government bonds
  

• d) Plans related to international trade

Which article of the Indian Constitution requires the government to present an annual financial statement?

• a) Article 110
  

• b) Article 111
  

• c) Article 112
  

• d) Article 113

Which of the following is not an objective of the government budget?

• a) Allocation of resources
  

• b) Management of public enterprises
  

• c) Generating inflation
  

• d) Redistribution of income

How does the government discourage the production of socially harmful goods?

• a) Through subsidies
  

• b) Through heavy taxation
  

• c) By increasing exports
  

• d) By providing loans

Which of the following is an example of a public good?

• a) National defense
  

• b) Private housing
  

• c) Food items
  

• d) Luxury cars

Revenue receipts are those that:

• a) Cause a reduction in government assets
  

• b) Do not create any liability for the government
  

• c) Increase the government’s liabilities
  

• d) Cause an increase in government expenditure

Which of the following is considered non-tax revenue?

• a) Income tax
  

• b) Corporate tax
  

• c) Fees and fines
  

• d) Customs duty

What is disinvestment?

Correct answer: c

• a) When the government invests in new public enterprises
  

• b) When the government borrows from international banks
  

• c) When the government sells shares in Public Sector Undertakings to the private sector
  

• d) When the government increases public expenditure