MCQ Questions on CUET Economics Chapter-The government objective

  • Board
    CBSE
  • Textbook
    NCERT
  • Class
    Class 12
  • Subject
    Economics
  • Chapter
    MCQ Questions on CUET Economics Chapter-The government objective
  • Chapter Name
    The government objective
  • Category
    CUET (Common University Entrance Test) UG

Important MCQ Questions on CUET Economics Chapter-The government objective with Detailed explanation

HT having an expert teacher of Economics prepared Important MCQ Questions on the CUET Economics Chapter-The government objective with Detailed explanations. All the Chapters in the syllabus of CUET Economics are covered with coverage of the entire syllabus. This page is prepared for Chapter-The government objective and covers all important topics of the competitive exam CUET for domain subject test. Check out the chapter-wise CUET Economics MCQ questions. 

MCQ Questions for CUET Economics Chapter-The government objective Set-1

Macroeconomic Economics - MCQ on The Government: Functions and scope

Class XII

Q.1.What is a government budget?

I. Annual Statement of Government Income

II. Annual Statement about the export or Import

III. Annual Statement of Government consumption

IV. Annual statement of the estimated receipts and expenditure

Answer:

IV.Annual statement of the estimated receipts and expenditure

Explanation: The annual revenue and expenditure for a particular fiscal year is called Government Budget

Q.2.What is the safe level of fiscal deficit?

I. 10% of Gross Domestic Product

II. 5% of Net Domestic Product

III. 5% of Gross Domestic Product

IV. 10% of Net Domestic Product

Answer:

III.5% of Gross Domestic Product

Explanation: 5% of Gross Domestic Product is the safest level of Fiscal Deficit decided by the government.

Q.3.What are the objectives of Government Budget

I. Economic growth

II. Reduction of poverty and employment

III. Reallocation of Resources

IV. All of them

Answer:

IV.All of them

Explanation: The Government budget is prepared to reallocate resources, reduce poverty and employment and to grow economy

Q.4.Capital Receipts

I. Create assets or reduce liabilities

II. Create liabilities or reduce assets

III. Create Liabilities and receipts’

IV. None of the above

Answer:

II.Create liabilities or reduce assets

Explanation: Capital receipts are government receipts that increase liabilities or reduce assets

Q.5 When government receipts are more than the estimated government expenditure.

I. Surplus Budget

II. Deficit Budget

III. Overall Budget

IV. Normal Budget

Answer:

I.Surplus Budget

Explanation: A surplus budget is a budget in which estimated government receipts are more than the estimated government expenditure.

Q.6 Sales Tax comes under

I. Tax Revenue

II. Non Tax revenue

III. Both

IV. None

Answer:

I.Tax Revenue

Explanation: Tax revenue may be defined as receipts from all kinds of taxes

Q.7.Penalties comes under

I. Tax Revenue

II. Non Tax revenue

III. Both

IV. None

Answer:

II.Non tax revenue

Explanation: Penalty is imposed on an illegal act and it has nothing to do with tax so it comes under Non tax items

Q.8.What is deficit financing?

I. Borrowing government from the Reserve Bank

II. Borrowing of government from the Sebi

III. Borrowing of government from the Foreign Countries

IV. Borrowing of government from the Financial Institutions

Answer:

I.Borrowing government from the Reserve Bank

Explanation: Borrowing government from the Reserve Bank by creating new currency

Q.9.How fiscal deficit is calculated?

I. Total budget expenditure-Total budget receipts.

II. Total budget receipts -Total budget expenditure net of borrowings.

III. Total Budget Expectation – Actual Budget Result

IV. None

Answer:

I. Total budget expenditure-Total budget receipts net of borrowings.

Explanation: Fiscal deficit is defined as the excess of all expenditure over total receipts reduced by borrowings

Q.10.Escheat comes under

I. Expenditure

II. Tax Items

III. Gifts

IV. Non Tax Items

Answer:

IV.Non Tax Items

Explanation: Escheat means all the claims of the government on the property of a person who died without having any legal heirs or without leaving a will.

Q.11.What is primary deficit

I. Fiscal deficit minus interest payments.

II. fiscal deficit minus Fiscal Surplus

III. interest payments minus fiscal deficit

IV. Fiscal Surplus- Fiscal Deficit

Answer:

I.Fiscal deficit minus interest payments.

Explanation: Primary deficit means a position where total expenditure of the government excluding interest payments exceeds sum total of its revenue receipts and non-debt capital receipts. Primary deficit means the fiscal deficit minus interest payments.

Q.12.Revenue received by the government in the form of prices paid for government supplied commodities and services are called

I. Government Revenue

II. Private revenue

III. Commercial revenue

IV. Revenue deficit

Answer:

III.Commercial revenue

Explanation: Commercial revenue means revenue received by the government in the form of prices paid for government supplied commodities and services

Q.13.Recovry of Loans are:

I. Revenue receipts

II. Tax Receipt

III. None

IV. Capital receipts

Answer:

Capital receipts

Explanation: In capital receipts, the government is under obligation to return the amount along with interest Recovery of loan is one of the source of capital Receipt

Q.14.Government’s estimated revenue receipts and revenue expenditures are:

I. Revenue Budget

II. Surplus Budget

III. Deficit Budget

IV. Capital Budget

Answer:

I. Revenue Budget

Explanation: Revenue budget is a statement of the government’s estimated revenue receipts and revenue expenditures for a period of one financial year. Revenue receipts are recurring or repetitive in nature.

Q.15.What type of tax is helpful in reducing inequalities?

I. Indirect Tax

II. Direct Tax

III. Non Tax

IV. None

Answer:

II. Direct Tax

Explanation: It is directly imposed on people and it is clearly defined so it reduce inequality

Q.16.Disinvestment of PSUs comes under

I. Revenue Expenditure

II. Capital Expenditure

III. Public revenue

IV. Capital receipts

Answer:

IV.Capital receipts

Explanation: Disinvestment of PSUs comes under Capital receipts

Q.17.What is fiscal discipline?

I. Control over receipts

II. Control over expenditures

III. Control over imports

IV. Control over fiscal deficit

Answer:

II.Control over expenditures

Explanation: Control over expenditures means maintaining the Fiscal Discipline

MCQ Questions for CUET Economics Chapter-The government objective Set-2

Q.18.Government is equal to government expenditure is

I. Deficit Budget

II. Surplus Budget

III. Balanced Budget

IV. Revenue Budget

Answer:

III. Balanced Budget

Explanation: Balanced budget is a budget in which estimated government revenue raised by the government is equal to government expenditure

Q.19.The provision of expenditure every year according to plan proposals is called

I. Planned Expenditure

II. Unplanned Expenditure

III. Current Expenditure

IV. Fixed Expenditure

Answer:

I. Planned Expenditure

Explanation: Plan expenditure is that public expenditure which represents current and investment outlays that arises due to plan proposals.

Q.20.What are the sources of financing deficit?

I. Borrowings from public and foreign government.

II. Withdrawing from its cash balances with RBI.

III. Borrowings from the RBI.

IV. All

Answer:

IV. All

Explanation: From All of them government can finance its deficit.

Q.21.Defense Services are

I. Planned Expenditure

II. Not Expenditure

III. Non Planned Expenditure

IV. None

Answer:

III.Non Planned Expenditure

Explanation: Defense Services are Non Planned Expenditure because war can be broken anytime

Q.22.Is shifting of burden is not possible in direct tax

I. Yes

II. No

III. May be

IV. Not Sure

Answer:

II.No

Explanation: Direct tax is paid by the person on whom it is not imposed. Hence, shifting of burden is not possible

Q.23.Indirect Tax is

I. Progressive

II. Regressive

III. Neutral

IV. None

Answer:

II.Regressive

Explanation: Indirect tax is paid by the consumers and it has a regressive nature

Q.24.How is the budget divided

I. Balanced Budget & Unbalanced Budget

II. Surplus Budget and deficit Budget

III. Public Budget & Private Budget

IV. Revenue Budget and Capital Budget

Answer:

IV.Revenue Budget and Capital Budget

Explanation: Revenue Budget and Capital Budget is a broader classification of the Government Budget

Q.25.Which government is empowered to tax income

I. Central Government

II. State Government

III. Village Panchayat

IV. District Government

Answer:

I. Central Government

Explanation: Central Government is mainly empowered to tax income

Q.26.Excise duty is

I. Direct

II. Indirect Tax

III. Non Tax

IV. None

Answer:

II.Indirect Tax

Explanation: Indirect tax is imposed on commodities.

Q.28.Which governments have the power to impose taxes on sale of commodities

I. Central Government

II. State Government

III. Village Panchayat

IV. District Government

Answer:

II.State Government

Explanation: When the commodity is sold the sales tax is imposed by government