, ,, ~ Pra ctic e Exercise

-f;. MUIt•Ip Ie Choice Quest,·ons '-• Q9. They are generally progressive in nature:
~ a. Direct tax b I d·rect t
. n I ax
Q l Budget is presen
ted as on: c. Both a. and b. d. None of these
a. 28th February b. 15th February Q10. They are generally proportional in nature.
c. 1st February d. 31st March a. Direct tax b. Indirect tax
Q2. The government can achiev c. Both a. and b.
e its budget objective d. None of these
of 'Recrs
1 tr·but·
1 10n of ·income· by ................... . Q11 Read the following chart carefully and ch005e the
a. managing the general price level in the economy correct alternative.
to the desired level
Revenue
b. increasing the Gross Domestic Product (GDP) of Budget
the economy
c. bringing the production of goods and services
under its direct and absolute control Revenue
d. rationalisation of taxes in pro-poor direction Expenditures
Q3. Tax and non-tax receipts
are the components of:
a. Capital receipts b. Revenue receipts Non-tax Plan Revenue Non-plan Revenue
c. Both a. and b. d. None of these Revenue Expenditures Expenditures
Q4. "Free distribution of LPG connection a. Tax Revenue b. Subsidies
to poor people
is a sign of social justice." c. Revenue Plan d. Direct Tax
Identify the 'Objective of Government Bu_dget' from Q12. The government should try to impose a higher rate
the above mentioned statement. (CBSE2021, Term-I) of taxation on harmful products such as cigarette,
a. Promo te economic growth . liquor, etc., in order to decrease their production.
And the government should give subsidies to the
b. Management of public enterprises
essential products like kerosene, LPG, etc., in order
c. Create equitable distribution of income
to increase their production.
d. Create fluctua tion in revenue of the government a. Economic stability
Q5. The payment made by owners of those properties b. Reallocation of resources
whose value has appreciated due to developmental c. Redistribution of income and wealth
activities of the government: d. None of the above
a. Penalties b. Escheat
Q13. In order to tackle the problem of rising general
c. Special assessment price level in an economy, government. may come
d. Challan
up with a surplus budget to achieve the budget
Q 6. "In the Annual Budget 2022- 23, the Government objective of............... . (cssr2023J
of India set up disinvestment targets oft 65,00 0
(i) reallocation of resources
crore:•
(ii) price stability
Such proceeds from disinvestment can be
classified as ............... receipts in the government (iii) redistribution of income
budget as it leads to ........ of the government. Alternatives:
(Choose the correct alternative) a. Only (i} ' · b. Only (ii)
(CBS£ 2023)
c. Only (iii) d. (i) and (iii)
a. capital. decrease in assets
Q14. Government budget helps the government to
b. revenue, increase in assets
provide investment in profit making PSUs and
c. capital. increase in liabilities
disinvestment in the sick PSUs:
d. revenue. decrease in liabilities a. Controls and manages PSUs
Q7. The burden of a ............ tax cannot be shifted i.e., b. Reallocation of resources
impact and incidence is on the same person. c. Redistribution of income and wealth
a. direct d. None of the above
b. indirect
c. Both a. and b. d. None of these
Q15. Which one of the following is not a capital
expenditure? (CBSE20J9)
Q 8. The burden of a ............ tax can be shifted i.e., a. Loans advanced by World Bank
impact and incidence is on different persons. b. Construction of school building
a. direct b. indirect c. Repayment of loans
c. Both a. and b. d. None of these d. None of the above
 pjVidends received from Public Sector Unde
QJ6, (P5Us) are a part of the government's........~~lngs Economics I Class 12 I 99
Q24,
Primary deficit In a government budget will be
(C8S£201 9) zero,When
a. non-tax revenue receipts ············· (C8S£2019)
b. tax receipts_ a. revenue deficit is zero
capital receipts b. net inte rest payments are zero
(.
d. capital expenditures _ c. fiscal deficit is zero
d. fiscal deftc't' 1s
· equal to .interest payments
-e Government of India has decided t Q25
Q11. •"
the adult popu
la . o vaccinate
t1on of India (With C
· ~x•.......deftcit refers to excess of revenue
. ovaxln/ ftsea year. over revenue receipts during the given
pelndlture
Covishield), without any charge. This would b
categorised as .... ............. . e a. Revenue b. Budgetary
a. revenue nature inco, r..2 , , , c. Fiscal d. Primary
b. capital nature expenditure
c. revenue nature expenditure
-i Statement Based Questions ~
d. capital nature income Q26· Read the following statements carefully:
Statement I: Recovery of loans is a non-debt
8 Read the following chart carefully and ch creating capital receipt.
Ql. . oose the
correct alternative:
Statement II: Recovery of loans cause a reduction
Capital in assets of the government.
Budget
In the Ught of the given statements, choose the
correct alternative from the following:
Capital (CBSE2021,Term-1)
Capital
Receipts Expenditure a. Statement I is true and statement II is false.
b. Statement II is true and statement I is false.
c. Both statements are true.
d. Both statements are false.
Plan Capital Q27. Read the following statements carefully:
Expenditure
·············· Statement l:The government budget isthe statement
a. Non'..capital showing actual receipts and expenditures of the
b. Capital investment government in the coming financial year.
c. Non-plan capital expenditure Statement II: The government budget is presented
by the Finance Minister of India.
d. Plan investment
In the light of the given statements, choose the
Q19. ............ deficit indicates how much government correct alternative from the following:
should borrow to meet. expenses other than a: Statement I is true and statement II is false.
interest.· b. Statement II is true and statement I is false.
c. Both statements are true.
a. Revenue . b. Budgetary d. Both statements are false.
c. Fiscal d. Primary
Q28. Read the following statements carefully:
Q20. Alow or zero, ............ deficit indicates that interest Statement I: Government budget is a detailed
commitments (on earlier loans) have compelled economic statement presented by Finance
the government to borrow. Minister.
a. revenue b. budgetary Statement II: Government budget consists of
financial programmes and policies of the
c. fiscal d. pri.~ ,~ry government for the next year.
Q21. ............ deficit refers to excess of total expenditures
In the light of _the given stateme!'ts, choose the
correct alternative from the following:
over total receipts during the given fiscal year. (C8Sf 2021, Term-I)
a. Revenue b. Budgetary a. Statement I is true and statement II is false.
c. Fiscal d. Primary b. Statement II is true and statement I is false.
Q22. ............ deficit
iodicates inability of the c. Both statements are true.
government to meet its regular and recurring d. Both statements are false.
expenditures.
a. Revem1e b. Budgetary -f Fill in the Blank
I

Type Questions~
c. Fiscal d. Primary . Q29. The government uses ............ taxatIon poricy to
Q23. The sources of financing fiscal deficit are
reduce the inequalities of income and wealth in the
borrowings and deficit financing (printing of new
. h ·is a better source and do country.
currency notes). Whic
(Choose the correct alternative to fill up the blank)
not increase money supply (inflatio~)? s
a. Deficit financing b. Borrowing a. progressive b. regressive
d· None of these c. fixed d. zero
c. Both a. an d b.
100 I MASlERMI~ CHAPTERWISE 0UEBTION BANK
Q 30. The tax Which is imposed on one person but
actually paid by another person is called ............ . Q44. Fiscal deficit can be zero in the economy.
Q45. Primary deficit indicates government's inability to
(Cho_ose the correct alternative to fill up the blank)
a. Direct tax b. Excise duty
meet its regular and recurring expenditure.
c. Indirect tax d. GST

Q31. The tax which imposed on one person and is paid

by the same person is called ............ .
-w Match the Column
I

Type Questions ~
Q46. From the following statements given in Column i
I
(Choose the correct alternative to fill up the blank) and Column II, choose the correct pair of statements:
a. Direct tax b. Excise duty
Column I Column II
c. Indirect tax d. GST
A. Budget 1. Parliament
Q32. Fiscal Deficit =............ - ............ .
(Choose the correct alternative to fill up the blanks) B. Budget presented in 2. 1st February
a. Total Receipts, Total Expenditures C. Budget presented on 3. Finance Minister
b. Total Expenditures, Total Receipts
D. Budget presented by 4. Annual statement of I
c. Total Expenditures, Total Receipts Excluding estimated receipts and
Borrowings estimate expenditure by the
d. Interest Rate, Borrowings government

Q 33. Revenue Receipts = ............ + .•......•.•. Receipts. A B C D

(Choose the correct alternative to fill up the blanks) a. 3 2 1 4
a. Tax, Non-tax b. Capital, Borrowing b. 4 2 3
c. Direct, Indirect d. Borrowing, Capital C. 1 2 4 3
Q34. If in an economy, the estimated receipts of d. 2 3 4 1
the government are less than the estimated
Q47. From the following statements given in Column I
expenditure, of that year, then the budget would
be called ............ budget. and Column 11,choose the correct pair of statements:

(Choose the correct alternative to fill up the blank) Column I Column II

a. Surplus b. Primary A. Escheat 1. Union Budget
c. Balance d. Deficit
B. Goods and Services Tax 2. Direct Tax
Q35. The claims of government on the property of a
person who dies without making a will or without C. Income Tax 3. Indirect Tax
having any legal heir is called ............ . D. Budget of Central Government 4. Non-tax Receipt
(Choose the correct alternative to fill up the blank)
A B C D
a. Escheat b. Property tax
a. 4 3 2 1
c. Indirect tax d. Direct tax
I
b. 3 2 4

-~J True/False Type Questions ~

,;,
C.

d.
3 4
4
2
2
1
3
Q36. Budget is presented on 1st February in the
Q48. From the following statements given in Column I
Parliament by Home Minister.
and Column II, choose the correct pair of statements:
Q37. Taxation is an effective tool to reduce the
inequalities of income. (CBSE 2019) Column I Column II
Q 38. Goods and services tax cannot be avoided. A. Repayment of loans and 1. Revenue
Q39. Non-debt creating capital receipts include recovery advances Expenditure
of loans and disinvestment. B. Special assessment 2. Capital Expenditure
Q40. Direct taxes have unlimited reach whereas indirect 3. Revenue Receipts
C. Borrowings
taxes have limited scope.
D. Expenditure on mid-day meal 4. Capital Receipts
Q 41. Expenditure on COVID-19 pandemic is a capital
expenditure of the government.
A B C D
Q42. Expenditure on mid-day meal is a revenue 4
a. 3 2
expenditure.
b. 4 3 2 1
Q43. Revenue deficit increases when government fails
C. 1 3 2 4
to recover loans forwarded to different nations.
(CBSE2019) d. 2 3 4 1
 Economics I Class 12 I 101
from the following statements
049. Column II, choose the given In Column I and Q52. From the following statements given In Column I
correct Pllr of lt.atements: and Column II,choose the correct pair of statements:
Column I
Column 11 Column II
Column I
A. Fiscal Year 1.
~evenue Expenditure >
evenue Receipts A. Policy of surplus budget 1. Capital expenditure
B. Fiscal Deficit 2. 1st April to 31st March B. Policy of deficit budget 2. Capital receipt
C. Revenue Deficit 3. Fiscal Deficit - Interest C. Creates liability of the 3. To overcome inflation in
Payments government the economy
D. primary Deficit 4. Borrowings D. Creates assets of the 4. To overcome deflation in
government the economy
A B C D
a. 2 3 4 A B C D
b. 4 2 3 1 a. 1 2 3 4
C. 2 4 1 3 b. 3 4 2 1
d. 4 3 2 C. 3 2 4
d. 2 3 4
Q50. From the following statements given in Column I and
Column II, choose the correct pair of statements: Q53. From the following statements giwn in Col&Bnn I and
Column I Column II, choose the correct pair of statements:
Column II
A. Equitable Distribution of 1. MGNREGA Column I Column II
Income
A. Primary deficit 1. Borrowings
B. Reallocation of Resources 2. Tax on rich, subsidy to poor
B. Zero primary deficit 2. Revenue deficit
c. Balanced Regional Growth 3. Tax on liquor. subsidy on
LPG C. Primary deficit 3. Fiscal deficit = Interest
+ Interest payments payments
o. Employment Opportunities 4. Rebate on electricity, tax
holidays to new industrial 4. Fiscal deficit - Interest
D. Revenue expenditure
units opened in backward payments
regions - Revenue receipts

A B C D A B C D

a. 1 2 3 4 a. 4 3 2

b. 3 4 2 b. 1 2 3 4

C. 2 3 4 C. 3 4 2
d. 3 2 4 d. 2 4 3

Q51. From the following statements given in Column I Q54. From the following statements given in Column I
and Column II, choose the correct pair of statements: and·Column II, choose the correct pair of statements:
Column I Column II Column.I. Column II
A Imposed and paid by the same 1. Escheat A. GDP growth 1. All revenue receipts other than taxes.
person
B. Direct tax 2. Impact and incidence on different
B. Imposed on one but paid by other 2. Non-taxable
persons.
person Receipts
C. Indirect tax 3. Impact and incidence on the same
C. Claim on property having no will or 3. Indirect Tax person.
legal heir ·
D. Non-tax 4. Investment in both public and private
D. Court fee, License fee 4. Direct Tax
receipt sector's increases.

A B C D A B C D
a. 4 3 2 a. 1 2 3 4

b. 2 3 4 b. 4 3 2 1
c. 3 2 4 C. 3 2 4
d. 2 3 1 4
d. 3 2 4