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    6 views2 pages

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    © All Rights Reserved
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    of 2

    True or False

    1.Government budget is a statement of actual receipts and expenditure of the


    government

    2. Indirect taxes are not convenient to realise

    3. payment of salaries to the government employees is a capital payment.

    4. Revenue budget is an account of assets and liabilities of the government.

    5. Primary deficit is the difference between revenue deficit and interest payment.

    6. Fiscal deficit is always greater than revenue deficit.

    7. Expenditure made on establishment of Metro Rail line in Delhi is a capital


    expenditure.

    8. Increase in fiscal deficit does not effect primary deficit.

    9. Fiscal deficit in the economy will be zero if there is no provision for borrowing in the
    budget.

    10. From the following data about a government budget, find out (a) Revenue deficit, (b)
    Fiscal deficit, and (c) Primary deficit.

    I.Capital receipts net of borrowings -95

    Ii.Revenue expenditure -100

    Iii. Interest payments -10

    iv.Revenue receipts -80

    v.Capital expenditure-110

    11. Payment of interest by government is Rs. 30,000 crore, which is 60% of primary
    deficit. Find amount of borrowing.

    12. Is deficit financing (printing of new currency) always beneficial? Comment.

    13. If there is inflation in a particular country, which type of government budget - surplus
    or deficit - is advisable ? Explain.

    14. Is fiscal deficits necessarily inflationary ? Is fiscal deficit advantageous always ?

    15. Deos public debt impose a burden ? Explain.

    16. Government raises its expenditure on producing public goods. Which economic
    value economic value does it reflect ? Explain.
    17. Raghuram Rajan, the Governor of RBI in a speech in july 2015 warned that the world
    was slipping into recession. The events in Greece justified what he said. The ratio of
    government debt-to-GDP was very high in case of Greece.

    (a) What in your opinion led to such an event as in Greece ?

    (b) Explain the chain effect.

    (c) What is the remedy for the above situation ? What economic value is highlighted
    here.

    18. The government of India has implemented DBT (Direct Benefit Transfer scheme),
    wherein subsidy on LPG is directly transferred to the bank a/c of the consumer. It is also
    asking rich people to give up subsidy altogether.

    (a) What in your opinion is the idea behind the above action of the government ?

    (b) Write two economic values highlighted here.

    19. If you were to be appointed as Finance Minister of india, which of direct taxes or
    indirect taxes would you prefer and why

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