MCQ- Public Expenditure

Q. Choose appropriate answers

1. Transfer payments include-

a) Old age pension                                               b) Subsidies

c) Interest on public debt                             d) All of the above

2. Interest payments are a part of –

a) Development Expenditure                              b) Non-Development Expenditure

c) Capital Expenditure                                          d) All of the above

3. Bharat Nirman, MGNREGA are examples of -

a) Plan Expenditure b) Non-Plan Expenditure

 c) Capital Expenditure d) None of the above

4.        Which of the following is not true of public budget?

a)     A budget contains only proposals of taxation.

b)     It refers to the policies of the government.

c)     It contains the estimated receipts and proposed expenditure.

d)     It reflects the programmes of the government.

5.        The number of sections of a good budget are –

a) Two                                                                b) Three

c) Five                                                               d) Eight

6.        The budget presented wken elections are due is known as –

a) Tentative Budget b) Proposed Budget

c) Zero Budget d) Lame Duck Budget

7.        Pick out the feature which is not applicable to a good budget,

a) Comprehensiveness b) Clarity

c) Objectivity d) Lengthy

8.        The finance commission's role is to -

a)     Propose New Taxes

b)     To Abolish Old taxes

c)     To review and modify arrangements

d)     None of the above

9.        Pick out the item which is not a part of the plan expenditure,

a) Agriculture b) Industry

c) Social Services d) Defense

10.     Pick out the item which is not a part of capital budget.

a) Market Borrowings b) Sale of Treasury Bulls

c) Revenue from Industry d) Net Small Savings

11.     Pick out the factor which is not a part of revenue budget.

a)     Current consumption expenditure on commodities.

b)     Current consumption expenditure on services

c)     Transfer payments

d)     Expenditure on machinery

12.     Pick out the item which is not a part of non-tax revenue,

a) Interest Receipts b) Dividends

c) Customs d) Profits

13.     Pick out the item which is not a part of tax revenue.

a) Interest b) Corporate Tax c) Excise d) Customs

14.      Pick out the item which is not a part of non-plan expenditure on the revenue side.

a) Defence	b) Central Assistance to states
c) Subsidies	d) None of the above
15.    Debts which have to be paid	at some specific future date are known as –
a) Redeemable Debts	b) Irredeemable Debts
c) Treasury	d) None of the above

16.      Loans taken by the government for purpose of war, earthquakes for covering budget deficit are -

a) Productive Debts                                       b) Unproductive

c) Voluntary Debts                                         d) None of the above

17.     Which of the following is not an objective of public debt management.

a)     Loans at low cost

b)  Repayment over a long period	3

c)     Stabilisation of the level of economic activity

d)     Economic growth

18.     Which is / are the advantages of redemption of debt.

a)     Saves the government from bankruptcy

b)     Reduces Cost

c)     Saves future generation from the pressure of public debt

d)     All of the above

19.     Pick out the feature which is not true in the case of repudiation of debt.

a)     Simplest method of liquidating a debt.

b)     It will increase the credibility of the government.

c)     Debtors may face loss.

d)     It is discriminating

20.     Pick out the method which is not a part of redemption,

a) Sinking Fund b) Surplus Budget c) Terminal Annuities d) Refunding

21.      The method by which a certain portion matures every year as decided by the lottery system.

a) Sinking Fund b) Surplus Revenues c) Terminal Annuities d) None of the above

22.     Pick out the feature which is not true of a capital levy.

a)     For paying off unproductive debt.

b)     It is paid by those who earn huge profits.

c)     It does not follow the principle of equity.

d)     It helps to fight inflation.

23.  Which of the following is the most comprehensive measure of budgetary imbalances?

a) Fiscal Deficit b) Revenue Deficit

c) Primary Deficit d) All of the above

24.      The full form of FRBM Act 2003 is-

1.     Fiscal Regulation and Budget Management Act, 2003.

2.     Fiscal Regulation and Banking Management Act, 2003.

3.     Fiscal Responsibility and Budget Management Act, 2003.

4.     Financial Responsibility and Budget Management Act, 2003.

25.      When budget revenue equals expenditure the budget shows –

a) Balance                                                 b) Deficit

c) Surplus                                                          d) None of the above

26.     The term fiscal federalism was introduced by -

a) Dalton                                                            b) Seligman

c) Musgrave                                                     d) None of the above

27.     The theory of fiscal federalism assumes -

1.     A federal system of government can be efficient and effective in solving problems.

2.     A federal government will be able to bring about economic stability allocation of resources.

3.     Since states and localities are not equal in their income, federalism is helpful.

4.     All of the above

[  Ans.: (1 - d), (2 - b), (3 - a), (4 - a), (5 - b), (6 - d), (7 - d), (8 - c), (9 - d), (10 - c), (11 - d), (12 - c), (13 - a), (14 - b), (15 - a), (16 - b), (17 - b), (18 - d), (19 - b), (20 - d), (21 - c), (22 - c), (23 - a), (24 - c), (25 - a), (26 - c), (27 - d)]