JOIN ADRE 2.0 Telegram Group

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

Questions
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]

The correct answer is National income has increased and per capita income has also increased but at a slower rate.

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]

The correct answer is 2004 - 2005. WPI tracks inflation at the producer level and CPI captures changes in prices levels at the consumer level. WPI does not capture changes in the prices of services, which CPI does. In WPI, more weightage is given to manufactured goods, while in CPI, more weightage is given to food items.

Advertisement
ADRE 2.0 Mock Test - 5 Start Test
ADRE 2.0 Mock Test - 5 Start Test

DOWNLOAD CURRENT AFFAIRS PDF FROM APP

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]

The correct answer is It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation.

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]

The correct answer is It is the impact of the price levels of previous year on the calculation of inflation rate. The base effect relates to inflation in the corresponding period of the previous year, if the inflation rate was too low in the corresponding period of the previous year, even a smaller rise in the Price Index will arithmetically give a high rate of inflation now

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]

The correct answer is It is an intense affirmative action of the Government to boost economic activity in the country. Fiscal stimulus consists of attempts by governments or government agencies to financially stimulate an economy. An economic stimulus is the use of monetary or fiscal policy changes to kick start growth during a recession.

46 Economic growth is usually coupled with
A inflation
B stagflation
C deflation
D All of these

Answer: Option [A]

Economic growth is usually coupled with inflation. Economic growth results in higher disposable income available with the consumers which increases the overall demand along with the supply available for the consumers. This increase in demand spurs inflation, which eventually becomes a necessary evil for a growing economy.

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]

Under increasing returns the supply curve is positively sloped from left to right. In most cases, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related.

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]

The correct answer is Excise duty. The excise duty's share in the total tax revenue which was 41.3% in 1991-92, declined to 25.1% in 2006-07 It is the most that has declined in the last 5 years. Corporation tax has maximum share followed by income tax. Service tax was introduced very late so it’s share would obviously increase.

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]

ADRE 2.0 MOCK TEST

Take Mock Tests

Government Schemes Mock Test Start Test!
Political Science Mock Test – 42 Start Test
History Test – 190 Start Test
Quantitative Aptitude Test Start Test!
Data Interpretation - Mock Test Start Test!
General Awareness - Mock Test Start Test!
Reasoning Ability - Mock Test Start Test!

Read More Economics Solved Questions

Chapters

Advertisement