Government Budget and the Economy Class 12 MCQs Questions with Answers
Question 1.
Financial Year in India is :
(a) April I to March 31
(b) January 1 to December 31
(c) October 1 to September 30
(d) None of the above
Answer
Answer: (a) April I to March 31
Question 2.
Which objectives government attempts to obtain by Budget
(a) To Promote Economic Development
(b) Balanced Regional Development
(c) Redistribution of Income and Wealth
(d) All the above
Answer
Answer: (d) All the above
Question 3.
Which is a component of Budget ?
(a) Budget Receipts
(b) Budget Expenditure
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (c) Both (a) and (b)
Question 4.
Which is a component of Budget Receipt ?
(a) Revenue Receipt
(b) Capital Receipt
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (c) Both (a) and (b)
Question 5.
Tax revenue of the Government includes :
(a) Income Tax
(b) Corporate Tax
(c) Excise Duty
(d) All of these
Answer
Answer: (d) All of these
Question 6.
Which is included in the Direct Tax ?
(a) Income Tax
(b) Gift Tax
(c) Both (a) and (b)
(d) Excise Duty
Answer
Answer: (c) Both (a) and (b)
Question 7.
Which is included in Indirect Tax ?
(a) Excise Duty
(b) Sales Tax
(c) Both (a) and (b)
(d) Wealth Tax
Answer
Answer: (c) Both (a) and (b)
Question 8.
The expenditures which do not create assets for the government is called :
(a) Revenue Expenditure
(b) Capital Expenditure
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (a) Revenue Expenditure
Question 9.
Direct tax is :
(a) Income Tax
(b) Gift Tax
(c) Both (a) and (b)
(d) None of these
Answer
Answer: (c) Both (a) and (b)
Question 10.
In India one rupee note is issued by :
(a) Reserve Bank of India
(b) Finance Ministry of Government of India
(c) State Bank of India
(d) None of these
Answer
Answer: (b) Finance Ministry of Government of India
Question 11.
Capital budget consist of:
(a) Revenue Receipts and Revenue Expenditure
(b) Capital Receipts and Capital Expenditure
(c) Direct and Indirect Tax
(d) None of these
Answer
Answer: (b) Capital Receipts and Capital Expenditure
Question 12.
Which of the following is an indirect tax ?
(a) Excise Duty
(b) Sales Tax
(c) Custom Duty
(d) All of these
Answer
Answer: (d) All of these
Question 13.
Which type of expenditure is made in bridge construction ?
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Both (a) and (b)
(d) None of the above
Answer
Answer: (a) Capital Expenditure
Question 14.
Which of the following budget is suitable for development economies ?
(a) Deficit Budget
(b) Balanced Budget
(c) Surplus Budget
(d) None of these
Answer
Answer: (a) Deficit Budget
Question 15.
What is the duration of a Budget ?
(a) Annual
(b) Two Years
(c) Five Years
(d) Ten Years
Answer
Answer: (a) Annual
Question 16.
Which of the following is included in fiscal policy ?
(a) Public Expenditure
(b) Tax
(c) Public Debt
(d) All of these
Answer
Answer: (d) All of these
Question 17.
Which of the following is capital expenditure of the government ?
(a) Interest Payment
(b) Purchase of House
(c) Expenses on Machinery
(d) All of the above
Answer
Answer: (a) Interest Payment
Question 18.
Budget may include :
(a) Revenue Deficit
(b) Fiscal Deficit
(c) Primary Deficit
(d) All of these
Answer
Answer: (d) All of these
Question 19.
Which of the following statement is true ?
(a) Fiscal deficit is the difference between total expenditure and total receipts
(b) Primary deficit is the difference between total receipt and interest payments
(c) Fiscal deficit is the sum of primary deficit and interest payment
(d) All of these
Answer
Answer: (c) Fiscal deficit is the sum of primary deficit and interest payment
Question 20.
Budget:
(a) is a description of income-expenditure of government
(b) is a document of economic policy of government
(c) is a description of non-programmes of the government
(d) All of these
Answer
Answer: (d) All of these
Question 21.
In an unbalanced budget:
(a) Income is greater than expenditure
(b) Expenditure is higher relative to income
(c) Deficit is covered by loans or printing of notes
(d) Only (b) and (c)
Answer
Answer: (d) Only (b) and (c)
Question 22.
Which is included in indirect tax ?
(a) Income tax
(b) Wealth tax
(c) Excise Duty
(d) Gift tax
Answer
Answer: (c) Excise Duty
Question 23.
Which one of the following is a pair of direct tax ?
(a) Excise duty and Wealth Tax
(b) Service Tax and Income Tax
(c) Excise Duty and Service Tax
(d) Wealth Tax and Income Tax
Answer
Answer: (d) Wealth Tax and Income Tax
Question 24.
Which of the following is not a revenue receipt ?
(a) Recovery of Loans
(b) Foreign Grants
(c) Profits of Public Enterprise
(d) Wealth Tax
Answer
Answer: (a) Recovery of Loans
Question 25.
Which of the following is a correct measure of primary deficit ?
(a) Fiscal deficit minus revenue deficit
(b) Revenue deficit minus interest payments
(c) Fiscal deficit minus interest payments
(d) Capital expenditure minus revenue expenditure
Answer
Answer: (c) Fiscal deficit minus interest payments
Question 26.
The duration of Government budget is :
(a) 5 years
(b) 2 years
(c) 1 year
(d) 10 years.
Answer
Answer: (c) 1 year
Question 27.
Budget is presented in the Parliament by :
(a) Prime Minister
(b) Home Minister
(c) Finance Minister
(d) Defence Minister.
Answer
Answer: (c) Finance Minister
Question 28.
Budget speech in Lok Sabha is given by :
(a) President
(b) Prime Minister
(c) Finance Minister
(d) Home Minister.
Answer
Answer: (c) Finance Minister
Question 29.
Professional tax is imposed by :
(a) Central Government
(b) State Government
(c) Municipal Corporation
(d) Gram Panchayat.
Answer
Answer: (b) State Government
Question 30.
From the following which is included in the direct tax :
(a) Income Tax
(b) Gift Tax
(c) Both (a) and (b)
(d) Excise Tax.
Answer
Answer: (c) Both (a) and (b)
Question 31.
Who issues 1 rupee note in India :
(a) Reserve Bank of India
(b) Finance Ministry of India
(c) State Bank of India
(d) None of these.
Answer
Answer: (b) Finance Ministry of India
Fill in the blanks:
1. …………………… is a document containing income and expenditure of the government.
Answer
Answer: Budget
2. Income tax is …………………… tax.
Answer
Answer: Direct
3. …………………… tax is levied on the value of the goods.
Answer
Answer: Advalorem
4. Service tax is levied by the ……………………
Answer
Answer: Central
5. ………… budget is considered good for the country.
Answer
Answer: Deficit
6. Finance bill contains …………………… proposals.
Answer
Answer: Tax
7. Government budget is presented on the last day of ……………………
Answer
Answer: February
State true or false :
1. Deficit budget is not considered as a good budget.
Answer
Answer: False
2. Electricity tax is levied by the State Government.
Answer
Answer: True
3. Budget speech is given by the Finance Minister.
Answer
Answer: True
4. Central excise duty is direct tax.
Answer
Answer: False
5. Interest payment is a planned item.
Answer
Answer: False
6. During deflation surplus budget is made.
Answer
Answer: True
7. Rail budget is generally not included in the annual budget.
Answer
Answer: True
Match the following
| ‘A’ | ‘B’ |
| 1. Income and expenditure of the government | (a) 31 March |
| 2. First of all finance bill is presented in the | (b) Budget |
| 3. Budget is presented on | (c) Details about income and expenditure |
| 4. Aim or Objective of the budget | (d) Lok sabha |
| 5. Main feature of the budget | (e) Economic development. |
Answer
Answer:
| ‘A’ | ‘B’ |
| 1. Income and expenditure of the government | (b) Budget |
| 2. First of all finance bill is presented in the | (d) Lok sabha |
| 3. Budget is presented on | (a) 31 March |
| 4. Aim or Objective of the budget | (e) Economic development. |
| 5. Main feature of the budget | (c) Details about income and expenditure |