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IBPS Clerk Government Budget and the Economy — practice questions — page 2

Explore 31 free Government Budget and the Economy questions in IBPS Clerk Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Government Budget and the Economy questions and exercises with answers

Showing questions 31–31 of 31.

Three of these claims are false. Remove them.Read the answer and worked solution →

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Three of these claims are false. Remove them.

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Questions
  1. Question
    Three of these statements about government receipts are false.
    Choices
    1. Item
      Borrowings are capital receipts
      Correct
      Yes
    2. Explanation
      Borrowing creates a liability, so it is a capital receipt.
      Item
      Borrowings are revenue receipts
    3. Explanation
      GST is levied on supply and passed on, so it is indirect.
      Item
      GST is a direct tax
    4. Explanation
      Wealth tax falls on the person assessed, so it is direct.
      Item
      Wealth tax is an indirect tax
  2. Question
    Three of these statements about deficits are false.
    Choices
    1. Item
      Primary deficit excludes interest
      Correct
      Yes
    2. Explanation
      Fiscal deficit includes interest payments; the primary one strips them out.
      Item
      Fiscal deficit excludes interest
    3. Explanation
      Revenue deficit covers revenue items only.
      Item
      Revenue deficit includes capital spending
    4. Explanation
      Fiscal deficit is precisely the borrowing requirement.
      Item
      Fiscal deficit ignores borrowing
Instructions
Three claims are false. Leave the true one standing.
Borrowings create a liability, so they are capital receipts, never revenue. GST is levied on goods and services, making it indirect, while wealth tax falls on the holder, making it direct. Primary deficit is precisely fiscal deficit minus interest. fiscal deficit still contains that interest, revenue deficit is confined to the revenue account, and fiscal deficit is the measure of borrowing need rather than something that ignores it.

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