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Indian Fiscal System General Awareness Multiple Choice Questions and Answers | Page-3

(21) The term ‘Balanced Growth’ refers to:
[A] Growth which brings about a balance between the owner and employee
[B] Growth which brings about a balance between the public and private sectors
[C] Growth which brings about a balance between the traditional and modern sector
[D] Growth pattern on which simultaneous investments are made in all the sectors of the economy, viz. Agriculture, Industry, Transport, Communication, etc.

Comment

Answer: Option [D]

The term ‘Balanced Growth’ refers to growth pattern on which simultaneous investments are made in all the sectors of the economy, viz. Agriculture, Industry, Transport, Communication, etc.

(22) Which of the following indicates the progress of a country ?
[A] Growth of GNP
[B] Reduction of unemployment
[C] Reduction in inequalities
[D] Growth of per capital income

Comment

Answer: Option [A]

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(23) The term ‘Invisible trade’ refers to the trade:
[A] of government with public institutions
[B] of government with other countries
[C] of the non-tangible services like the customer service, bank, marine companies and shipping companies
[D] of corporate and financial institutions with government

Comment

Answer: Option [C]

The correct answer is of the non-tangible services like the customer service, bank, marine companies and shipping companies. An invisible trade is an international transaction that does not include an exchange of tangible goods. Customer service outsourcing, overseas banking transactions, and the medical tourism industry all are examples of invisible trade.

(24) What is ‘Recession’ ?
[A] Rise in the cost of production, especially because of wage increase
[B] Reduction of Gross Domestic Product(GDP) lasts hardly for few months
[C] Increase in money supply without a matching increase in production
[D] None of these

Comment

Answer: Option [B]

Reduction of Gross Domestic Product(GDP) lasts hardly for few months.

(25) Buyer’s market is a situation where:
[A] The supply exceeds the demand
[B] The demand exceeds the supply
[C] The demand and supply are well balanced
[D] Commodities are available at competitive rates

Comment

Answer: Option [A]

Buyer’s market is a situation where the supply exceeds the demand. Buyer’s market denotes the place where the supply exceeds the demand. In this type of market, the buyers have the advantage of price negotiation. If the demand exceeds the supply then such type of market situation is called Seller’s market.

(26) The rate of growth of per capita income is equal to:
[A] Rate of growth of national income
[B] Rate of growth of national income minus the rate of demographic inflation
[C] Growth in national income divided by the increase in population
[D] Rate of growth of national income divided by the rate of growth of population

Comment

Answer: Option [B]

The rate of growth of per capita income is equal to rate of growth of national income minus the rate of demographic inflation.

(27) The per capita income is obtained by:
[A] Summing up the income of all the citizens of the country
[B] Dividing national income by the population
[C] Estimating the minimum income of the individual citizens
[D] Dividing the total national capital with the profit earned

Comment

Answer: Option [B]

The per capita income is obtained by dividing national income by the population. Per capita income is used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population. Per capita income for a nation is calculated by dividing the country's national income by its population.

(28) Which of the following taxes is not levied by the Union Government ?
[A] Income Tax
[B] Land Revenue
[C] Excise Duty
[D] Wealth Tax

Comment

Answer: Option [D]

The correct answer is Wealth Tax. Wealth tax is levied on the net wealth owned by a person on the valuation date, i.e., 31st March of every year. Wealth-tax is levied at 1% on the net wealth in excess of Rs. 30,00,000.

(29) Which of the following is not a source of state government tax ?
[A] Land revenue
[B] Entertainment tax
[C] Sales and purchase of newspapers
[D] Stamp duty other than financial documents

Comment

Answer: Option [C]

The correct answer is Sales and purchase of newspapers. In accounting for non profit organisation, the sale of old newspapers is generally considered as an income.

(30) Which of the following is a indirect tax ?
[A] Tax on income
[B] Tax on wealth
[C] Tax on expenditure
[D] Tax on entertainment

Comment

Answer: Option [D]

The correct answer is Tax on entertainment. Entertainment tax is an indirect tax because it is borne by one person who is availing the services; but a liability to deposit is of the other person who is providing entertainment services.

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