Economy Set 1 MCQs

Economy GK

Economy Set 1 MCQs

Practice Economy GK MCQs on basic economic concepts including economy, economics, microeconomics, macroeconomics, goods and services, demand and supply, factors of production, opportunity cost, economic activities, sectors of economy and other fundamental concepts frequently asked in SSC, Railway, Banking, UPSC, JKSSB, JKPSC, Police, Defence and other competitive examinations.

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Total Questions

Practice Questions

Page 5 of 111
Question #81
Fiscal deficit is best defined as:
A. total receipts minus total expenditure
B. total expenditure minus total receipts excluding borrowings
C. revenue expenditure minus revenue receipts
D. total expenditure minus interest payments
Discuss
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Correct Answer: Option B

Explanation:
Fiscal deficit is the excess of total expenditure over total receipts excluding borrowings.
This question belongs to: Economy GK Economy Set 1
Question #82
Revenue deficit is calculated as:
A. revenue expenditure minus revenue receipts
B. revenue receipts minus revenue expenditure
C. total expenditure minus total receipts
D. fiscal deficit minus primary deficit
Discuss
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Correct Answer: Option A

Explanation:
Revenue deficit is revenue expenditure minus revenue receipts.
This question belongs to: Economy GK Economy Set 1
Question #83
Primary deficit is equal to fiscal deficit minus:
A. interest payments
B. tax revenue
C. subsidies
D. capital expenditure
Discuss
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Correct Answer: Option A

Explanation:
Primary deficit = fiscal deficit - interest payments.
This question belongs to: Economy GK Economy Set 1
Question #84
Effective Revenue Deficit is defined as revenue deficit minus:
A. tax revenue
B. non-tax revenue
C. grants for creation of capital assets
D. interest payments
Discuss
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Correct Answer: Option C

Explanation:
Effective Revenue Deficit is revenue deficit minus grants for creation of capital assets.
This question belongs to: Economy GK Economy Set 1
Question #85
The Fiscal Responsibility and Budget Management Act was enacted in which year?
A. 2005
B. 2001
C. 1999
D. 2003
Discuss
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Correct Answer: Option D

Explanation:
The FRBM Act was enacted in 2003.
This question belongs to: Economy GK Economy Set 1
Question #86
The Finance Commission is constituted under which Article of the Constitution?
A. 360
B. 324
C. 356
D. 280
Discuss
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Correct Answer: Option D

Explanation:
The Finance Commission is constituted under Article 280 of the Constitution.
This question belongs to: Economy GK Economy Set 1
Question #87
The Goods and Services Tax was introduced through which Constitutional Amendment Act?
A. 99th
B. 101st
C. 102nd
D. 100th
Discuss
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Correct Answer: Option B

Explanation:
GST was introduced through the 101st Constitutional Amendment Act, 2016.
This question belongs to: Economy GK Economy Set 1
Question #88
The Goods and Services Tax Council is chaired by:
A. RBI Governor
B. Prime Minister
C. Chief Economic Adviser
D. Union Finance Minister
Discuss
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Correct Answer: Option D

Explanation:
The GST Council is chaired by the Union Finance Minister.
This question belongs to: Economy GK Economy Set 1
Question #89
Which of the following taxes has NOT been subsumed under GST?
A. Service Tax
B. State VAT
C. Basic Customs Duty
D. Central Excise Duty
Discuss
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Correct Answer: Option C

Explanation:
Basic Customs Duty has not been subsumed under GST.
This question belongs to: Economy GK Economy Set 1
Question #90
A cess imposed by the Union Government is levied:
A. only on imports
B. only on income
C. for a specific purpose
D. only on luxury goods
Discuss
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Correct Answer: Option C

Explanation:
A cess is levied for a specific purpose and must be used for that purpose.
This question belongs to: Economy GK Economy Set 1
Question #91
The canon of equity in taxation means that:
A. tax should be convenient to pay
B. persons with higher ability should pay more taxes
C. tax should be economical to collect
D. tax rate should be uniform for all
Discuss
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Correct Answer: Option B

Explanation:
The canon of equity requires taxation based on ability to pay, so the richer pay more.
This question belongs to: Economy GK Economy Set 1
Question #92
The Laffer curve shows the relationship between:
A. income and consumption
B. interest rate and investment
C. tax rate and tax revenue
D. inflation and unemployment
Discuss
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Correct Answer: Option C

Explanation:
The Laffer curve shows the relationship between tax rates and total tax revenue.
This question belongs to: Economy GK Economy Set 1
Question #93
Zero-based budgeting requires that:
A. every expenditure item is justified from zero each year
B. deficit is zero
C. previous year's budget is the base for all allocations
D. only capital expenditure is budgeted
Discuss
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Correct Answer: Option A

Explanation:
Zero-based budgeting requires all expenditures to be justified from zero each budget period.
This question belongs to: Economy GK Economy Set 1
Question #94
Which of the following is a feature of a public good?
A. Non-rivalrous and non-excludable
B. Non-rivalrous and excludable
C. Rivalrous and non-excludable
D. Rivalrous and excludable
Discuss
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Correct Answer: Option A

Explanation:
Public goods are non-rivalrous and non-excludable.
This question belongs to: Economy GK Economy Set 1
Question #95
NITI Aayog was established in 2015 to replace:
A. National Development Council
B. Economic Advisory Council
C. Finance Commission
D. Planning Commission
Discuss
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Correct Answer: Option D

Explanation:
NITI Aayog replaced the Planning Commission in 2015.
This question belongs to: Economy GK Economy Set 1
Question #96
Who is the ex-officio Chairperson of NITI Aayog?
A. Prime Minister
B. President
C. Finance Minister
D. Vice President
Discuss
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Correct Answer: Option A

Explanation:
The Prime Minister is the ex-officio Chairperson of NITI Aayog.
This question belongs to: Economy GK Economy Set 1
Question #97
The First Five Year Plan of India was based on the:
A. Nehru model
B. Harrod-Domar model
C. Gandhian model
D. Mahalanobis model
Discuss
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Correct Answer: Option B

Explanation:
The First Five Year Plan was based on the Harrod-Domar model.
This question belongs to: Economy GK Economy Set 1
Question #98
The Second Five Year Plan was based on which model?
A. Mahalanobis
B. Rostow
C. Solow
D. Harrod-Domar
Discuss
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Correct Answer: Option A

Explanation:
The Second Five Year Plan was based on the Mahalanobis model.
This question belongs to: Economy GK Economy Set 1
Question #99
The main emphasis of the Second Five Year Plan was:
A. rapid industrialization with emphasis on basic and heavy industries
B. eradication of illiteracy
C. reduction of population growth
D. rapid development of agriculture
Discuss
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Correct Answer: Option A

Explanation:
The Second Plan emphasized rapid industrialization, especially basic and heavy industries.
This question belongs to: Economy GK Economy Set 1
Question #100
The Gadgil formula was used for:
A. sharing of income tax
B. determining agricultural prices
C. distribution of central plan assistance among states
D. allocation of bank credit
Discuss
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Correct Answer: Option C

Explanation:
The Gadgil formula was used to allocate central plan assistance among states.
This question belongs to: Economy GK Economy Set 1
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