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Indian Fiscal System General Awareness Multiple Choice Questions and Answers | Page-5

41 Which of the following is a true statement about India Since 1951 ?
A National and per capita incomes have both increased fast
B National income has increased but per capita income has decreased
C National income and per capita income have increased every year
D National income has increased and per capita income has also increased but at a slower rate

Answer: Option [D]
42 Which one of the following is the updated base for Wholesale Price Index (WPI) ?
A 2002 - 2003
B 2004 - 2005
C 2005 - 2006
D 2006 - 2007

Answer: Option [B]
43 Which one of the following is not a feature of “Value Added Tax” ?
A It is a multi-point destination-based system of taxation
B It is a tax 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 Governments are only a facilitator for its successful implementation

Answer: Option [D]
44 A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect” ?
A It is the impact of drastic deficiency in supply due to failure of crops
B It is the impact of the surge in demand due to rapid economic growth
C It is the impact of the price levels of previous year on the calculation of inflation rate
D None of the above

Answer: Option [C]
45 Which one of the following statements appropriately describes the “fiscal stimulus” ?
A It is a massive investment by the Government in manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth
B It is an intense affirmative action of the Government to boost economic activity in the country
C It is Government’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation
D It is an extreme affirmative action by the Government to pursue its policy of financial inclusion

Answer: Option [B]
46 Economic growth is usually coupled with
A inflation
B stagflation
C deflation
D All of these

Answer: Option [A]
47 Under increasing returns the supply curve is
A positively sloped from left to right
B negatively sloped from left to right
C parallel to the quantity-axis
D parallel to the price-axis

Answer: Option [A]
48 In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years
A Service tax
B Personal income tax
C Excise duty
D Corporation tax

Answer: Option [C]
49 Which of the following are the main causes of slow rate of growth of per capita income in India ?
I. High capital-output ratio
II. High rate of growth of population
III. High rate of capital formation
IV. High level of fiscal deficits
A Only I
B I and II only
C I and III only
D All of these

Answer: Option [B]
50 In terms of economics visiting various places of India by foreign tourists is :
A Export
B Import
C Production
D Consumption

Answer: Option [A]


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