Mock Test – Government Budget and the Economy

1. The following information is given for an imaginary country:

Sr.No.	Particulars	Amount ( in lakhs)
(i) (ii) (iii) (iv) (v) (v)	Tax revenue Capital receipts Non-tax revenue Borrowings Revenue expenditure Interest payments	47 34 10 32 80 20

On the basis of given data, the value of primary deficit will be:

2. Which of the following statement is true?

3. Suppose, following data is presented, for an imaginary economy:

Sr.No.	Particulars	Amount ( in crore)
(i) (ii) (iii) (iv) (v)	Fiscal deficit Revenue deficit Primary deficit Revenue receipts Non-debt capital receipts	12,000 9,000 5,000 6,000 10,000

On the basis of given data, the value of capital expenditure will be:

4. Observe the given figure carefully and choose the correct option from the alternatives given below:

These are the objectives of:

5. Revenue deficit in the government budget is:

6. Assertion (A): Highway and road works announced in Kerala, Tamil Nadu, West Bengal and Assam in budget 2021.

Reason (R): Such announcement will increase revenue expenditure of the government.

7. Identify which objective of the government budget should we use to tackle the issue depicted in the image given below.

8. Identify which of the following statements is true?

9. Primary deficit in a government budget will be zero, when __________.

10. Choose the correct alternatives to be filled in given blanks A, B and C.

11. The Government can achieve its budget objective of ‘redistribution of income’ by:

12. Which out of the following is a non-developmental expenditure?

13. In 2021, the government said that despite the current resource crunch, it has decided to hike its capital expenditure by 34.5%.

14. Which of the following are capital receipts of the government?

15. The non-tax revenue in the following is: (choose the correct alternative)

16. Interest payments are subtracted from which deficit to arrive at Primary Deficit:

17. _______ is/are debt creating capital receipts for the Government.

18. Which of the following can help reduce the fiscal deficit?

19. Read the following data and identify the correct value of fiscal deficit from the options given below:

Sr.No.	Item	Amount ( in billions)
(i) (ii) (iii) (iv) (v) (vi)	Capital receipts Revenue expenditure Interest payments Borrowings Tax revenue Non-tax revenue	68 160 20 32 50 10

Alternatives:

20. Assertion (A): Deficit budget is good for developing countries like India.

Reason (R): It helps in generating additional demand of goods and services during the times of recession.

21. Statement 1: Government Budget is a detailed economic statement presented by Finance Minister.

Statement 2: Government Budget consists of financial programmes and policies of the government for the next year.

22. Assertion (A): Custom duty on cotton raised from 0 percent to 10 percent in the Budget 2021.

Reason (R): Custom Duty is not subsumed in GST.

23. Assertion (A): Repayment of loans by government is the capital expenditure of government.

Reason (R): Capital expenditure of government leads to creation of assets or reduction in liabilities.

24. The Government of India has decided to vaccinate the adult population of India (with Covaxin/Covishield), without any charge. This would be categorised as _________.

25. Pension payment is an example of:

26. Primary deficit is borrowing requirements of government for making ______________.

27. Repayment of Loans is an example of:

28. Primary deficit in a government budget is: (Choose the correct alternative)

29. Suppose, following data is presented for an imaginary economy

On the basis of given data, the value of capital expenditure will be:

30. Which out of the following is an indirect tax?