1. Which of the following are referred to as the developed economies?
Correct : C. Countries having large per capita income
2. An advalorem duty is a tax on the basis of: [IAS 1988]
Correct : A. the price of a commodity
3. Consider the following statements with regard to Statutory liquidity Ratio (SLR) :
1. To meet SLR, commercial banks can use cash only.
2. SLR is maintained by the banks with themselves. 3. SLR restricts the banks' leverage in pumping more money into the economy.
Which of the statements given above is/are correct? [CDS 2010]
Correct : C. 2 and 3
4. Which of the following is not true about 'vote-on-account'? [Bank PO 1991]
Correct : A. It is a budget presented in the Parliament to cover the deficit left by the last budget
5. Consider the following statements:
1. The repo rate is the rate at which other banks borrow from the Reserve Bank of India.
2. A value of 1 for Gini Coefficient in a country implies that there is perfectly equal income for everyone in its population.
Which of the statements giver, above is/are correct? [IAS 2007]
Correct : A. 1 only
6. The system of Budget was introduced in India during the viceroyalty of: [Central Excise 1994]
Correct : A. Canning
7. Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns [IAS 2006]
Correct : C. both fiscal and revenue deficit
8. Temporary tax levied to obtain additional revenue is called:
Correct : D. surcharge
9. A tax Which is paid by the person on whom the tax is incident is called a :
Correct : C. direct tax
10. Rate of growth of an economy is measured in terms of:
Correct : D. national income
11. The standard of living in a country is represented by its:
Correct : B. per capita income
12. Which is the best measure of economic growth of a country ?
Correct : A. GNP
13. Since 1951, in India:
Correct : C. national income has increased and per capita income has also increased but at a slower rate
14. Which of the following expenses do not require the sanction of Parliament?
I. Salary and allowances of the President and CAG
II. Debt charges of the Government
III. Defence expenditure
IV. Maintenance expenditure of embassies
Correct : C. I, II
15. Once the demands for grants and expenditure of different departments are passed by the Parliament, a bill to draw money from Consolidated Fund India for these purposes is introduced. This bill is called:
Correct : C. appropriation bill
16. By which bill does the government make arrangement for the collection of revenues for a year?
Correct : B. Finance Bill
17. Grants or advances made by the House to enable the government to carry on until the
voting of the demands for grants and passing of the General Appropriation Bill is called:
Correct : A. vote on account
18. On account of some national emergency or in order to carry out some secret mission, the government sometimes requires funds but may not give the details of the expenditure estimates. The House grants some lumpsum for this called :
Correct : B. vote of Credit
19. Consider the following statements:
(A) In India since independence the share of the primary sector has been declining while the shares. of the secondary and tertiary sectors have been increasing
(B) This trend shows that Indian economy is passing through the transition from an agricultural to an industrial economy While one of the following is correct?
Correct : A. both A and Bare correct
20. Which of the following gives a correct picture of the share of various sectors in economic growth in India over the years?
1. Primary sector-stagnant
2. Secondary sector-increasing
3. Tertiary sector-decreasing
Correct : C. 2 only
21. Which of the following is wrongly matched?
Correct : C. Corporation tax-levied by corporations for civic amenities
22. The basic attribute of a formal organization is : [CPO AC 2003]
Correct : D. rules and regulations
23. If the price of an inferior good falls, its demand: [CPO SI 2003]
Correct : C. remains constant
24. The existence of a Parallel Economy or Black Money: [CPO SI 2003]
Correct : B. makes the monetary policies less effective
25. Put the main sources of revenue of the Central Government in ascending order of importance:
1. Income tax
2. Corporation tax
3. Customs
4. Excise duties
Correct : D. 4, 3, 2, 1
26. The highest sector wise contribution to gross domestic saving comes from:
Correct : B. household sector
27. An amount given by a government agency or even private body to encourage a
particular economic activity is a :
Correct : C. subsidy
28. Why has the general budget till recently always been presented at 5 o’ clock in the evening?
Correct : D. It is a carry-over from times of British rule when the Budget could be discussed in the British Payment simultaneously
29. Which of the following would signify scarcity in economics?
Correct : B. Availability of 10 kg of rice against a demand for 15 kg
30. The per capita income has been low in India because:
Correct : A. of population growth
31. The rate of growth of the tertiary sector has been:
Correct : A. higher than the overall rate of growth of the net domestic product
32. Since independence, both development and non-development expenditures have Increased, the increase in the former being a little more than in the other. Non development expenditure involves:
1. interest payment
2. subsidies
3. defence
4. irrigation
Correct : C. 1, 2 and 3
33. Which among the following formulates fiscal policy?
Correct : B. Finance Ministry
34. Which among the following is the regulatory authority for giving clearance for External Commercial borrowing?
Correct : B. RBI
35. The Zero Base Budgeting in India was first experimented from:
Correct : A. April, 1987
36. The prices at which the government purchases food grains for maintaining the public distribution system and for building up buffer stocks are known as :
Correct : B. Procurement Prices
37. Who is the chairman of 13th Finance Commission?
Correct : D. Vijay Kelkar
38. The South Asian Free Trade Agreement (SAFTA) was introduced with a view of levying how much customs duty for trading any product within the SAARC zone? [RBI Grade B Officer 2011]
Correct : D. No customs duty
39. 'Balanced Growth' means:
Correct : D. growth pattern on which simultaneous investments are made in all the sectors of the economy, viz., Agriculture, Industry, Transport, Communication, etc.
40. Increase in Oil Pool Deficit implies:
Correct : A. increasing gap between international and domestic oil prices
41. Dear Money Policy implies:
Correct : D. high interest rates
42. Which of the following is wrongly matched:
Correct : B. interest rate-fiscal policy
43. Railway Budget in India was separated from general budget in :
Correct : A. 1924-25
44. In recent years the capital outlays for the defence service have been:
Correct : A. increasing steadily
45. Which one of the following is the most important item of non-plan expenditure?
Correct : A. Interest payment
46. Which among the following is true? 1. Decrease in cash reserve ratio injects higher liquidity in the system 2. Higher liquidity in the system may soften interest rates 3. Higher market borrowing by the government leads to rise in interest rates Choose your answer from:
Correct : D. 1, 2 and 3
47. One of the problems in calculating the national income in India correctly is : [Railways 1994]
Correct : C. non-monetised consumption
48. India's progress has been reasonably satisfactory in connection with:
Correct : D. growth of GNP
49. Among Indian Economists who had done pioneering work on National Income ?
Correct : C. V. K. R.V. Rao
50. Who was the chairman of National Income Committee?
Correct : A. P. C. Mahalanobis
51. The recommendations of the Finance Commission are:
Correct : D. accepted or rejected by the government according to its convenience
52. After 1991, the Central Government implemented various far-reaching reforms in the
area of taxation. This was based on the recommendations of the: [CDS 1999]
Correct : B. Rajah Chelliah Committee
53. To know whether the rich are getting richer and the poor getting poorer, it is necessary
to compare; [IAS 1994]
Correct : B. the distribution of income of an identical set of income recipients in different periods of time
54. National income of India is compiled by:
Correct : D. Central Statistical Organisation
55. Which one of the following is the correct statements?
Service tax is a/an [IAS 2006]
Correct : B. indirect tax levied by the Central Government
56. If saving exceeds investment, the national income will :
Correct : D. remain constant
57. Which of the following are the main causes of slow rate of growth of per capita income in India? [IAS 1993]
1. High capital-output ratio
2. High rate of growth of population
3. High rate of capital formation
4. High level of fiscal deficits
Correct : A. 1 and 2
58. Which of the following is not part of state tax?
Correct : C. Sales and purchase of newspapers
59. VAT is alternate of:
Correct : B. central tax
60. Which of the following is not a direct tax?
Correct : D. Tax on entertainment
61. In economic terms, which of the following factors determine the 'Individual's demand' of a product/commodity? [RBI Grade B Officer 2011]
A. Price of a commodity
B. Income of the individual
C. Utility and quality of a commodity
Correct : D. All A, B, & C
62. Share of Direct tax in post economic reform is:
Correct : A. increasing
63. Many times we see in financial journals/bulletins a term M3. What is M3? [RBI Grade
B Officer 2011]
Correct : D. None of these
64. Consider the following statements: In India, stamp duties on financial transactions are:
1. levied and collected by the State Government
2. appropriated by the Union Government
Which of the statements is/are correct?
Correct : D. Neither 1 nor 2
65. Tax collection of Central govt. was lowest as compare to G.D.P., in which of the
following year?
Correct : A. 1999-2000
66. In India GDP is higher than GNP because country's:
Correct : A. import > export
67. In India, the service tax was first introduced in the year: [CDS 2001]
Correct : C. 1994
68. In gross domestic saving by sector of origin, the four sectors in order of importance are:
Correct : B. Household Sector, Corporate Sector, Government Sector, Public Enterprises
69. The main reason for low growth rate in India, inspite of high rate of savings and capital formation is: [IAS 1995]
Correct : C. low capital/output ratio
70. Which among the following sectors received the largest Central plan outlay in the last few Central Government annual budgets? [CDS 2002]
Correct : A. Energy
71. After the initiation of economic reforms in 1991-92 the percentage share of: [CDS 1999]
Correct : B. Both direct and indirect taxes increased in gross tax revenue
72. Which of the following statements about indirect taxes in India is/are true?
1. Yield from indirect taxes is much more than that from direct taxes
2. Indirect taxes have grown faster than direct taxes since independence
3. Indirect taxes are ultimately paid for by persons who do not actually pay the taxes to the Government
4. Increase in indirect taxes is a welcome feature in a developing country
Correct : D. 1, 2 and 3
73. Which of the following is not an indirect tax?
Correct : A. Land revenue
74. Which of the following is not a direct tax?
Correct : B. Sales tax
75. All taxes come under:
Correct : A. revenue receipts
76. Estimation of national income in India is difficult due to :
I. illiteracy of people
II. non-monetised consumption
III. inflation
IV. people holding multiple jobs
Correct : D. I, II and IV
77. The annual financial statement shows the receipts and payments of the government under the 3 parts in which government accounts are kept in : 1. Consolidated Fund 2. Contingency Fund 3. Public Account Which of the following items are covered under the Public Account?
Correct : D. Transactions relating to provident fund, small savings, etc.
78. 'Liquidity trap' is a situation in which:
Correct : C. the rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash
79. Consider the following:
1. Market Borrowing
2. Treasury Bills
3. Special Securities to the RBI
Which of these is/are components of internal debt of the government?
Correct : D. 1, 2 and 3
80. The RBI uses the following instruments for quantitative central of credit:
(i) Cash Reserve Ratio (ii) Bank Rate (iii) Open Market Operations (iv) Margin Requirements Choose your answer from:
Correct : C. (i), (ii) and (iii)
81. MODVAT is different from VAT in the sense that:
1. under MODVAT, tax is levied only on value addition while under VAT, excise is imposed on final value and then rebate is given on inputs
2. MODVAT is only at the production stage while VAT extends both to production and distribution stage
3. under MODVAT, excise is levied on final value and then rebate is given on inputs while under VAT, tax is levied only on value addition
4. MODVAT implies rationalization of excise duty only while VAT implies rationalization of excise, sales and turnover taxes etc. also
Choose correct answer from:
Correct : C. 2, 3 and 4
82. Consider the following taxes:
1. Corporation Tax
2. Value Added Tax
3. Wealth Tax
4. Import duty
Which of these is/are Indirect taxes?
Correct : B. 2 and 4
83. The tax whose share in overall taxation revenue has gone up rapidly during the planning
period is :
Correct : D. tax on production
84. The most appropriate measure of a country's economic growth is the:
Correct : D. per capita real income
85. When the ratio of indirect taxes to total taxation revenue is very high, it leads to :
1. rise in the price level
2. higher taxation burden on the rich
3. higher taxation burden on the poor
4. fall in tax revenues
Correct : B. 1 and 3
86. CENVAT is associated with:
Correct : A. rate of indirect tax
87. Taxation and the government's expenditure policy are dealt under the :
Correct : C. fiscal policy
88. Deficit financing leads to inflation in general, but it can be checked if:
Correct : A. government expenditure leads to increase in aggregate supply in ratio of aggregate demand
89. The budget broadly comprises:
(i) revenue budget, and
(li) capital budget. Which of the
following item or items is/are not covered under the revenue budget?
I. Different proceeds of taxes and other duties levied by the government
II. Interest and dividend on investments made by the government
III. Expenditure on running the government and various services
IV. Market loans raised by the government
Correct : D. only IV
90. Value-added tax is :
Correct : A. an ad valorem tax on domestic final consumption collected at all stages between production and the point of final sale
91. What is the main source of revenue to meet different expenditures?
Correct : C. Internal borrowings
92. Which one of the following statements regarding the levying, collecting and distribution of Income Tax is correct? [IAS 1999]
Correct : A. The Union levies, collects and distributes the proceeds of income tax between itself and the states
93. What are “Open Market Operations" ? [SSC Graduate 2003]
Correct : C. Selling of gilt-edged securities by the Government
94. Which of the following is poorest state in India?
Correct : A. Odisha
95. The 'gilt-edged' market deals in : [UP PCS 2002]
Correct : B. bullion
96. How does the consumer benefit with VAT? [CPO SI 2003]
Correct : A. It removes tax on tax and thus reduces price-rise
97. Investment in public works is known as :
Correct : B. capital expenditure
98. The rising prices in India can be checked through: 1. Budgetary policy 2. Monetary policy 3. Increasing production 4. Increasing income levels Choose your answer from:
Correct : B. 1, 2 and 3
99. A budgetary deficit means:
Correct : A. total expenditure is more than total revenue
100. Fiscal deficit in the budget means: [CDS 1999]
Correct : B. Budgetary deficit plus the net borrowings of the government