Static Quiz 01 February 2025 (Indian Economy)
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Static Quiz 01 February 2025 (Indian Economy) For UPSC Exam
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1. Question
With reference to ‘Fiscal Marksmanship’, which of the following statements is correct?
CorrectAnswer: (b) It refers to the accuracy of the government’s forecast of fiscal parameters.
Explanation:
Fiscal Marksmanship refers to the accuracy with which the government can forecast key fiscal parameters like revenue, expenditure, and fiscal deficit. A lack of fiscal marksmanship leads to deviations between budget estimates and actual figures. It highlights the importance of realistic budget preparation.IncorrectAnswer: (b) It refers to the accuracy of the government’s forecast of fiscal parameters.
Explanation:
Fiscal Marksmanship refers to the accuracy with which the government can forecast key fiscal parameters like revenue, expenditure, and fiscal deficit. A lack of fiscal marksmanship leads to deviations between budget estimates and actual figures. It highlights the importance of realistic budget preparation. - Question 2 of 5
2. Question
With reference to taxation regime in India, which one of the following statements is correct regarding ‘Surcharge’?
CorrectAnswer: (b) The government can utilise the proceeds of surcharge for whichever purpose it deems fit.
Explanation:
A surcharge is an additional charge on taxes applied to high-income individuals or specific categories of taxpayers. The proceeds of the surcharge are not part of the divisible pool and remain entirely with the Union Government, allowing it to use the funds at its discretion. Surcharge is not shared with states.IncorrectAnswer: (b) The government can utilise the proceeds of surcharge for whichever purpose it deems fit.
Explanation:
A surcharge is an additional charge on taxes applied to high-income individuals or specific categories of taxpayers. The proceeds of the surcharge are not part of the divisible pool and remain entirely with the Union Government, allowing it to use the funds at its discretion. Surcharge is not shared with states. - Question 3 of 5
3. Question
Which of the following best describes the distinction between Public Goods and Private Goods?
CorrectAnswer: (b) Purchasing power of a person determines whether he/she can avail the private goods, whereas it is not so in public goods.
Explanation:
Public goods are non-excludable and non-rivalrous, meaning they are available to everyone, regardless of their ability to pay (e.g., street lighting, national defense). Private goods are excludable and rivalrous, meaning only those who have the purchasing power can access them. Public goods are typically provided by the government due to market failure.IncorrectAnswer: (b) Purchasing power of a person determines whether he/she can avail the private goods, whereas it is not so in public goods.
Explanation:
Public goods are non-excludable and non-rivalrous, meaning they are available to everyone, regardless of their ability to pay (e.g., street lighting, national defense). Private goods are excludable and rivalrous, meaning only those who have the purchasing power can access them. Public goods are typically provided by the government due to market failure. - Question 4 of 5
4. Question
Consider the following statements regarding the terms often seen with respect to Budget:
1. Revenue Receipts means all the income which does not increase the liability for the Government.
2. Capital Receipts include all Revenue and Non-Revenue Receipts of the Government.
Which of the following statements is/are correct?CorrectAnswer: (a) 1 only
Explanation:
• Statement 1 is correct: Revenue Receipts are government earnings that do not increase liabilities or reduce assets, such as taxes and interest receipts.
• Statement 2 is incorrect: Capital Receipts are non-revenue receipts that either increase liabilities (e.g., loans) or reduce assets (e.g., disinvestment). It does not include revenue receipts.IncorrectAnswer: (a) 1 only
Explanation:
• Statement 1 is correct: Revenue Receipts are government earnings that do not increase liabilities or reduce assets, such as taxes and interest receipts.
• Statement 2 is incorrect: Capital Receipts are non-revenue receipts that either increase liabilities (e.g., loans) or reduce assets (e.g., disinvestment). It does not include revenue receipts. - Question 5 of 5
5. Question
Which of the following are part of the Revenue Expenditure of the Government?
1. Expenditure on Social Services
2. Grants given by the Government to foreign countries
3. Loan Repayments by the Government
4. Loan Disbursals by the Government
5. Subsidies given by the Government
How many of the above options are correct?CorrectAnswer: (b) Only three
Explanation:
• Expenditure on Social Services (Yes): This is a recurring expense incurred for welfare schemes, which is part of revenue expenditure.
• Grants given by the Government to foreign countries (Yes): Grants are part of revenue expenditure as they do not result in asset creation.
• Loan Repayments by the Government (No): Loan repayment reduces liabilities and is part of capital expenditure.
• Loan Disbursals by the Government (No): Loan disbursals are considered capital expenditure as they result in asset creation.
• Subsidies given by the Government (Yes): Subsidies are recurring expenditures and are part of revenue expenditure.IncorrectAnswer: (b) Only three
Explanation:
• Expenditure on Social Services (Yes): This is a recurring expense incurred for welfare schemes, which is part of revenue expenditure.
• Grants given by the Government to foreign countries (Yes): Grants are part of revenue expenditure as they do not result in asset creation.
• Loan Repayments by the Government (No): Loan repayment reduces liabilities and is part of capital expenditure.
• Loan Disbursals by the Government (No): Loan disbursals are considered capital expenditure as they result in asset creation.
• Subsidies given by the Government (Yes): Subsidies are recurring expenditures and are part of revenue expenditure.
