{"id":17642,"date":"2022-05-25T16:30:45","date_gmt":"2022-05-25T11:00:45","guid":{"rendered":"https:\/\/mcq-questions.com\/?p=17642"},"modified":"2022-05-17T11:02:42","modified_gmt":"2022-05-17T05:32:42","slug":"mcq-questions-for-class-12-economics-chapter-5-part-a","status":"publish","type":"post","link":"https:\/\/mcq-questions.com\/mcq-questions-for-class-12-economics-chapter-5-part-a\/","title":{"rendered":"MCQ Questions for Class 12 Economics Chapter 5 Government Budget and the Economy with Answers"},"content":{"rendered":"

Students who are searching for NCERT MCQ Questions for Class 12 Economics Chapter 5 Government Budget and the Economy with Answers Pdf free download are compiled here to get good practice on all fundamentals. Know your preparation level on MCQ Questions for Class 12 Economics with Answers<\/a>. You can also verify your answers from our provided Government Budget and the Economy Class 12 MCQs Questions with Answers. So, ace up your preparation with MCQ on Government Budget and the Economy Class 12 Objective Questions.<\/p>\n

Government Budget and the Economy Class 12 MCQs Questions with Answers<\/h2>\n

Choose the correct alternative.<\/span><\/p>\n

Question 1.
\nWhich of the following is a non-tax revenue?
\n(a) export duty
\n(b) import duty
\n(c) dividends
\n(d) excise duty<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (c) dividends<\/p>\n<\/details>\n

\n

Question 2.
\nThe primary deficit in a government budget is
\n(a) Revenue expenditure minus revenue receipts
\n(b) Total expenditure minus total receipts
\n(c) Revenue deficit minus interest payment
\n(d) Fiscal deficit minus interest payment<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (d) Fiscal deficit minus interest payment<\/p>\n<\/details>\n

\n

Question 3.
\nDirect tax is called direct because it is collected from the
\n(a) the producers on goods produced
\n(b) the sellers on goods sold
\n(c) the buyers of goods
\n(d) the income earners<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (d) the income earners<\/p>\n<\/details>\n

\n

Question 4.
\nThe primary deficit in a government budget will be zero, when _______
\n(a) Revenue deficit is zero
\n(b) Net interest payments are zero
\n(c) Fiscal deficit is zero
\n(d) Fiscal deficit is equal to interest payment<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (d) Fiscal deficit is equal to interest payment<\/p>\n<\/details>\n

\n

Question 5.
\nWhich one of these is a revenue expenditure?
\n(a) Purchase of an asset
\n(b) Loans advanced
\n(c) Subsidies
\n(d) Expenditure on acquisition of land<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (c) Subsidies<\/p>\n<\/details>\n

\n

Question 6.
\nWhich one of the following is a combination of direct taxes?
\n(a) Excise duty and wealth tax
\n(b) Service tax and income tax
\n(c) Excise duty and service tax
\n(d) Wealth tax and income tax<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (d) Wealth tax and income tax<\/p>\n<\/details>\n

\n

Question 7.
\nWhich of the following statement is true?
\n(a) Loan from IMF is a revenue receipt.
\n(b) Higher revenue deficit necessarily leads to higher fiscal deficit.
\n(c) Borrowings by the government represent a situation of fiscal deficit.
\n(d) Revenue deficit is the excess of capital received over the revenue receipts.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (c) Borrowings by the government represent a situation of fiscal deficit.<\/p>\n<\/details>\n

\n

Question 8.
\nWhich of the following is not a revenue receipt?
\n(a) Recovery of loans
\n(b) Foreign grants
\n(c) Profit of public enterprises
\n(d) Wealth tax<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (a) Recovery of loans<\/p>\n<\/details>\n

\n

Question 9.
\nPrimary deficit is borrowing requirements of the government for payment(s)
\n(a) of interest
\n(b) other than interest
\n(c) of all types
\n(d) that are specific<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (b) other than interest<\/p>\n<\/details>\n

\n

Question 10.
\nWhich of the following sources of receipts in the government budget increases its liabilities?
\n(a) Direct taxes
\n(b) Recovery of loans
\n(c) Borrowings
\n(d) Dividend from PSUs<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (c) Borrowings<\/p>\n<\/details>\n

\n

Question 11.
\nWhich of the following is an indirect tax?
\n(a) Profit tax
\n(b) Wealth tax
\n(c) Custom duty
\n(d) Gift tax<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (c) Custom duty<\/p>\n<\/details>\n

\n

Question 12.
\nBorrowing in the government budget is
\n(a) revenue deficit
\n(b) fiscal deficit
\n(c) primary deficit
\n(d) deficit in taxes<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: (b) fiscal deficit<\/p>\n<\/details>\n

\n

Fill in the blanks with the correct word.<\/span><\/p>\n

Question 13.
\nAny debt from abroad involves a ________<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: burden<\/p>\n<\/details>\n

\n

Question 14.
\nDeficit budget is that in which total expenditure is _______ total receipts.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: greater than<\/p>\n<\/details>\n

\n

Question 15.
\n_________ tax is that in which final burden of the tax falls on the person who pays it.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: Direct<\/p>\n<\/details>\n

\n

Question 16.
\nGovernment expenditure on Mid-Day Meal scheme running in government (state-run) schools is a type of _______ expenditure in the government budget.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: revenue<\/p>\n<\/details>\n

\n

Question 17.
\nThe formula to calculate primary deficit is ________<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: Fiscal Deficit – Interest Payments<\/p>\n<\/details>\n

\n

State whether the following statements are True or False. Give reasons.<\/span><\/p>\n

Question 18.
\nIndirect taxes are not convenient to realize.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nIndirect taxes are easy to realize since they are included in the prices of commodities.<\/p>\n<\/details>\n

\n

Question 19.
\nPayment of salaries to the government employees is a capital payment.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nPayment of salary is a revenue payment.<\/p>\n<\/details>\n

\n

Question 20.
\nExpenditure made on the establishment of the Metro rail line in Delhi is a capital expenditure.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: True
\nThis expenditure has created assets.<\/p>\n<\/details>\n

\n

Question 21.
\nPublic borrowing is a capital receipt.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: True
\nIt creates liability for the government.<\/p>\n<\/details>\n

\n

Question 22.
\nRecovery of loan is a revenue receipt.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nIt is a capital receipt as it reduces the asset of the government.<\/p>\n<\/details>\n

\n

Question 23.
\nSales tax is an indirect tax.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: True
\nIts burden can be shifted on others.<\/p>\n<\/details>\n

\n

Question 24.
\nService tax is a direct tax.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nIt is an indirect tax as its burden can be shifted.<\/p>\n<\/details>\n

\n

Question 25.
\nGrants by the government are treated as revenue expenditure.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: True
\nAll grants are treated as revenue expenditure of the government, even though some of them may lead to asset formation.<\/p>\n<\/details>\n

\n

Question 26.
\nExcess of capital expenditure over capital receipt is called revenue deficit.<\/p>\n

\nAnswer<\/span><\/summary>\n

Answer: False
\nIt is called a deficit in the capital budget.<\/p>\n<\/details>\n

\n

Match the alternatives given in Column II with respective terms in Column I.<\/span><\/p>\n

Question 27.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
Column I<\/td>\nColumn II<\/td>\n<\/tr>\n
(i) Revenue Expenditure<\/td>\n(a) Recovery of loans<\/td>\n<\/tr>\n
(ii) Capital Expenditure<\/td>\n(b) Tax revenue<\/td>\n<\/tr>\n
(iii) Revenue Receipts<\/td>\n(c) Neither creates assets nor reduces liabilities<\/td>\n<\/tr>\n
(iv) Capital Receipts<\/td>\n(d) Income tax<\/td>\n<\/tr>\n
(v) Direct Tax<\/td>\n(e) Revenue receipt<\/td>\n<\/tr>\n
(vi) Indirect Tax<\/td>\n(f) Excise duty<\/td>\n<\/tr>\n
(vii) Borrowings from IMF<\/td>\n(g) Capital receipt<\/td>\n<\/tr>\n
(viii) Dividends paid to the Government by Commercial Banks<\/td>\n(h) Either creates assets or reduces liabilities<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\nAnswer<\/span><\/summary>\n

Answer:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
Column I<\/td>\nColumn II<\/td>\n<\/tr>\n
(i) Revenue Expenditure<\/td>\n(c) Neither creates assets nor reduces liabilities<\/td>\n<\/tr>\n
(ii) Capital Expenditure<\/td>\n(h) Either creates assets or reduces liabilities<\/td>\n<\/tr>\n
(iii) Revenue Receipts<\/td>\n(b) Tax revenue<\/td>\n<\/tr>\n
(iv) Capital Receipts<\/td>\n(a) Recovery of loans<\/td>\n<\/tr>\n
(v) Direct Tax<\/td>\n(d) Income tax<\/td>\n<\/tr>\n
(vi) Indirect Tax<\/td>\n(f) Excise duty<\/td>\n<\/tr>\n
(vii) Borrowings from IMF<\/td>\n(g) Capital receipt<\/td>\n<\/tr>\n
(viii) Dividends paid to the Government by Commercial Banks<\/td>\n(e) Revenue receipt<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/details>\n
\n

Use the above-provided NCERT MCQ Questions for Class 12 Economics Chapter 5 Government Budget and the Economy with Answers Pdf free download and get a good grip on the fundamentals. Need any support from our end during the preparation of CBSE Class 12 Economics Government Budget and the Economy MCQs Multiple Choice Questions with Answers then leave your comments below. We’ll revert back to you soon.<\/p>\n","protected":false},"excerpt":{"rendered":"

Students who are searching for NCERT MCQ Questions for Class 12 Economics Chapter 5 Government Budget and the Economy with Answers Pdf free download are compiled here to get good practice on all fundamentals. Know your preparation level on MCQ Questions for Class 12 Economics with Answers. You can also verify your answers from our …<\/p>\n

MCQ Questions for Class 12 Economics Chapter 5 Government Budget and the Economy with Answers<\/span> Read More »<\/a><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","spay_email":""},"categories":[35],"tags":[],"yoast_head":"\nMCQ Questions for Class 12 Economics Chapter 5 Government Budget and the Economy with Answers - MCQ Questions<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mcq-questions.com\/mcq-questions-for-class-12-economics-chapter-5-part-a\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"MCQ Questions for Class 12 Economics Chapter 5 Government Budget and the Economy with Answers - MCQ Questions\" \/>\n<meta property=\"og:description\" content=\"Students who are searching for NCERT MCQ Questions for Class 12 Economics Chapter 5 Government Budget and the Economy with Answers Pdf free download are compiled here to get good practice on all fundamentals. 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