This is the Day-28 questions of the CAF Revision plan for prelims. The questions are based on the syllabus as provided in the schedule. Aspirants are requested to go through the detailed CAF strategy to understand the need of the UPSC prelims and to prepare well for the same. Attempt the questions honestly. The link to key answers and explanations of this test is at the end of the questions. The maximum time to attempt the 18 questions is 25 minutes.
Q.1) The term ‘Monetised Deficit’ related to the budget process often in news is
(a) Difference between revenue expenditure and revenue receipts.
(b) Difference between capital expenditure and capital receipts.
(c) The part of the fiscal deficit which was provided by the RBI to the government in a particular year.
(d) The part of the fiscal deficit which was received by the government in a particular year in the form of grant from other countries or international agencies.
Q.2) Consider the following statements about ‘Surplus Budget’?
- The budgetary proposals of a government for a particular year proposes lesser expenditures than the receipts, then it is a surplus budget.
- The Union Budget in India had presented the surplus budget in the year 1958.
Which of the above statements is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) None
Q.3) Borrowing of treasury bills by the scheduled commercial banks results in
(a) Increases the capital receipts of the Government of India Budget.
(b) decreases the capital receipts of the Government of India Budget.
(c) Increases the fiscal deficit of the central government.
(d) Decreases the fiscal deficit of the central government.
Q.4) Government’s fiscal policy should be aimed at
(a) stabilise the level of output and employment
(b) taxing the rich and giving subsidy to the poor
(c) socio-economic development
(d) Human capital formation
Q.5) With reference to India’s decision to levy an equalization tax of 6% on online advertisement services offered by non-resident entities, which of the following statements is/are correct?
- It is introduced as a part of the Income Tax Act.
- Non-resident entities that offer advertisement services in India can claim a tax credit in their home country under the “Double Taxation Avoidance Agreements”.
Select the correct answer using the code given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Q.6) Consider the following statements
- The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments.
- The Central Government has domestic liabilities of 21% of GDP as compared to that of war of GDP of the State 2 Governments.
- As per the Constitution of India, it is mandatory for a State to take the Central Government’s consent for raising any loan if the former owes any outstanding liabilities to the latter.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Q.7) If there has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit?
- Reducing revenue expenditure
- Introducing new welfare schemes
- Rationalizing subsidies
- Reducing import duty
Select the correct answer using the code given below.
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1,2,3 and 4
Q.8) Which of the following is/are included in the capital budget of the Government of India?
- Expenditure on acquisition of assets like roads, buildings, machinery, etc.
- Loans received from foreign governments.
- Loans and advances granted to the States and Union Territories.
Select the correct answer using the code given below.
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Q.9) Deficit Financing means
(a) Difference of total expenditure and income by revenue from all sources.
(b) Government spends in excess of revenues so that a budget deficit is incurred which is financed by the borrowings.
(c) Difference in borrowing and external and internal resources.
(d) Capital expenditure on items of public construction, public enterprises and public borrowings.
Q.10) What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’?
- It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
- It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.
- It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.
Select the correct answer using the code given below:
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1,2 and 3
Q.11) Consider the following statements:
- Tax revenue as a percent of GDP of India has steadily increased in the last decade.
- Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Q.12) Which of the following measure(s) is/are example(s) of expansionary fiscal policy?
- Decrease in tax rate
- Increase in pensions
- Increase in unemployment compensation
- Increase in tax rate
Select the correct answer using the codes given below.
a) 2 and 3 only
b) 1, 2 and 4 only
c) 1, 2 and 3 only
d) 1, 2, 3 and 4
Q.13) Which of the following policies can be adopted to promote ‘fiscal consolidation’?
- Increasing FDI in insurance
- Enactment of food security laws
- Direct Benefit Transfer
Select the correct answer using the codes given below.
a) 2 and 3 only
b) 1 and 3 only
c) 2 only
d) 1, 2 and 3
Q.14) With reference to the Minimum Alternative Tax (MAT), consider the following statements:
- It is calculated on the profit shown in the Profit and Loss Account of the company.
- It aims to make those companies pay at least some tax which were paying little or no tax.
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Q.15) ‘immune checkpoint therapy’ was often in news due to
(a) Type-2 Polio
(b) MDR Tuberculosis
(c) Nobel Prize in Physiology or Medicine
(d) both (b) and (c)
Q.16) Which among the following releases Global Hunger Index?
(a) Welthungerhilfe and Concern Worldwide
(b) World Food Program
(c) UNO
(d) FAO
Q.17) Various Organisations and Institutes measure the hunger levels across the world and India. Which among the following dimension the surveys use for measuring the ‘Child Undernutrition’.
- Wasting
- Stunting
- Under five mortality
Choose the correct answers from the codes given below
(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) 1, 2 and 3
Q.18) Which among the following heritage locations were chosen for UNESCO Global Geopark Network site status?
(a) Lonar Lake, Maharashtra
(b) St. Mary’s Island and Malpe Beach, Karnataka
(c) Bhimbetka rock shelters, Madhya Pradesh
(d) both (a) and (b)