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Indian Fiscal System General Knowledge MCQ Questions & Answers

Questions
1 Income tax, corporate tax, inheritance tax etc. are incident on the person or organisation. These taxes are called :
A local tax
B indirect tax
C direct tax
D rate

Answer: Option [C]

The correct answer is direct tax. Direct taxes include income tax, inheritance tax, national insurance contributions, capital gains tax, and corporation tax (a tax on company profits). The burden of a direct tax cannot be passed on.

2 Rate of growth of an economy is measured in terms of :
A per capita income
B industrial development
C number of people who have been lifted above the poverty line
D national income

Answer: Option [D]

The correct answer is national income. National Income refers to the income of the whole economy including all the sectors at a given point of time. It only estimates the income of all the sectors and does not say the exact figure as it is impossible to tell the exact income figure of an economy. Economic growth of any nation is measured in national income aggregates of that nation.

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3 Which of the following represent the standard of living in a country ?
A National income
B Per capita income
C Poverty ratio
D Unemployment rate

Answer: Option [B]

The correct answer is Per capita income. Per capita income is a measure of the amount of money earned per person in a nation or geographic region. Per capita income is used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population.

4 Which is the best measure of economic growth of a country ?
A GNP
B GDP
C Net revenue
D None of these

Answer: Option [B]

The correct answer is GDP. Economists use many different methods to measure how fast the economy is growing. The most common way to measure the economy is real gross domestic product, or real GDP. GDP is the total value of everything - goods and services - produced in our economy.

5 By which bill does the government make arrangement for the collection of revenues for a year ?
A Supplementary Budget
B Finance Bill
C Fiscal Budget
D Economic Bill

Answer: Option [B]

The correct answer is Finance Bill. The Finance Bill is accompanied by a Memorandum containing explanations of the provisions included in it. The Finance Bill can be introduced only in Lok Sabha. However, the Rajya Sabha can recommend amendments in the Bill. The bill has to be passed by the Parliament within 75 days of its introduction.

6 National income of a country is determind on the basis of:
A Total revenue of the state
B Net profit earned and expenditure incurred by the state
C Production of goods and services
D All of the above

Answer: Option [C]

National income of a country is determind on the basis of Production of goods and services. National income means the value of goods and services produced by a country during a financial year. Thus, it is the net result of all economic activities of any country during a period of one year and is valued in terms of money.

7 Which of the following is not a method of estimating national income ?
A income method
B Value-added method
C Expenditure method
D Export-import method

Answer: Option [D]

The correct answer is Export-import method.

8 The national income of India is calculated mainly through :
A production method alone
B expenditure method alone
C production and expenditure methods
D production and income method

Answer: Option [D]

The national income of India is calculated mainly through production and income method.

9 An ad valorem duty is a tax on the basis of :
A the price of a commodity
B the value added
C the advertisement expenditure
D the unit of the commodity

Answer: Option [A]

An ad valorem duty is a tax on the basis of the price of a commodity. An ad valorem tax is a tax whose amount is based on the value of a transaction or of property. It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT).

10 The system of the budget was introduced in india during the viceroyalty of :
A Canning
B Dalhouseie
C Ripon
D Elgin

Answer: Option [A]

The system of the budget was introduced in india during the viceroyalty of Canning. India's First budget was introduced in February, 1860 by James Wilson. It was introduced during the Viceroyalty of Lord Canning.

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