Economics Quiz on Indian Fiscal System

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

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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

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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

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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

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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

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Answer: Option [B]

46 Economic growth is usually coupled with

A inflation

B stagflation

C deflation

D All of these

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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

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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

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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

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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

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Answer: Option [A]

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

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