Government Budget and the Economy quiz

Which of the following is a capital receipt?

Primary deficit is equal to:

Which of the following is an indirect tax?

Fiscal deficit equals:

Payment of salaries to government employees is:

Disinvestment is a:

A budget in which estimated expenditure exceeds estimated receipts is:

Which item creates an asset for the government?

A zero primary deficit means:

Fines and penalties collected by the government are:

Distinguish between revenue expenditure and capital expenditure. (2 marks)

What is meant by revenue deficit? What does it indicate? (2 marks)

Why are public goods provided by the government? Give two examples. (2 marks)

Is recovery of loans a revenue receipt or capital receipt? Give reason. (2 marks)

What is progressive taxation? How does it reduce inequality? (2 marks)

Distinguish between direct and indirect taxes. (2 marks)

Explain how the budget helps in reallocation of resources. (2 marks)

What is a balanced budget? Is it suitable for a developing economy? (2 marks)

Why is borrowing a capital receipt? (2 marks)

Give two ways in which a fiscal deficit can be financed. (2 marks)

The revenue deficit of a government is Rs 40,000 crore and revenue receipts are Rs 1,60,000 crore. Calculate revenue expenditure. (3 marks)

The fiscal deficit is Rs 300 crore and the primary deficit is Rs 100 crore. Calculate interest payments and the borrowings of the government. (3 marks)

Revenue receipts are Rs 900 crore, non-debt capital receipts Rs 100 crore and total expenditure Rs 1,400 crore. Interest payments are Rs 250 crore. Calculate fiscal deficit and primary deficit. (3 marks)

Calculate revenue deficit, fiscal deficit and primary deficit (Rs crore): revenue expenditure 700 (including interest 150), revenue receipts 500, capital expenditure 300, non-debt capital receipts 80. (3 marks)

Tax collections of a government are (Rs crore): income tax 400, corporation tax 500, GST 600, customs duty 100. Calculate the share of direct taxes and indirect taxes in total tax revenue as percentages. (3 marks)

Read the passage and answer the questions. In the Union Budget, the government reduced income tax rates for lower income groups and raised GST on luxury cars and tobacco. It also continued free food grains for poor households. (i) Identify the objective of the budget shown. (ii) Why is higher tax on luxury goods justified? (iii) Classify free food grains as revenue or capital expenditure. (5 marks)

Read the passage and answer the questions. A government's budget showed revenue receipts of Rs 30 lakh crore, revenue expenditure of Rs 35 lakh crore, capital expenditure of Rs 10 lakh crore, non-debt capital receipts of Rs 1 lakh crore and interest payments of Rs 11 lakh crore. (i) Calculate revenue deficit. (ii) Calculate fiscal deficit. (iii) Calculate primary deficit and interpret it. (5 marks)

Read the passage and answer the questions. The government sold 10% of its shares in a public sector insurance company and used the money to build highways. (i) Classify the receipt. (ii) Classify the expenditure. (iii) Explain the effect on the fiscal deficit. (5 marks)

Read the passage and answer the questions. During a slowdown, the government increased spending on rural roads and housing and reduced some taxes, even though this raised the fiscal deficit. (i) Which objective of the budget is being pursued? (ii) Why is a higher fiscal deficit acceptable here? (iii) State one risk of continuing such a deficit for many years. (5 marks)

Read the passage and answer the questions. A large part of a government's borrowing goes towards paying interest on past loans, leaving little for development works. (i) Which deficit measure shows this situation best? (ii) Explain the debt trap. (iii) Suggest two ways to reduce the fiscal deficit. (5 marks)

Explain the components of a government budget with a flowchart, giving two examples of each type of receipt and expenditure. (6 marks)

Explain revenue deficit, fiscal deficit and primary deficit with formulae and their implications for the economy. (6 marks)

Explain the objectives of a government budget in detail. (6 marks)

Distinguish between direct and indirect taxes, and between revenue and capital receipts, on three bases each. Draw a chart classifying government receipts. (6 marks)

Explain how the government budget can be used to achieve economic stability during inflation and deflation. Draw a simple chart showing the fiscal measures in each case. (6 marks)