Which of the following is a non-debt creating capital receipt of the government? MCQ with Answer and Explanation

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Which of the following is a non-debt creating capital receipt of the government?

A. Market borrowings

B. Treasury bills

C. External commercial borrowings

D. Recovery of loans

Answer: Option D

Solution (By JKSSB Mock Tests)

Recovery of loans is a non-debt capital receipt because it does not create a future liability. Borrowings of all kinds create debt.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Goods and Services Tax' rate on air travel in business class is:

A. 5%

B. 28%

C. 18%

D. 12%

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Correct Answer: Option D

Explanation:
Business class air travel attracts 12% GST.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of public finance, the concept of 'Ricardian Equivalence' suggests that:

A. Deficit financing always increases private consumption

B. Government borrowing is always expansionary

C. Tax-financed and debt-financed government spending have the same effect on the economy

D. Public debt has no intergenerational implications

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Correct Answer: Option C

Explanation:
Ricardian Equivalence, proposed by David Ricardo and revived by Robert Barro, argues that rational agents anticipate future taxes to repay debt, so government borrowing does not stimulate demand.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a major objective of the World Trade Organisation?

A. Providing development loans

B. Maintaining exchange rate stability

C. Promoting free and fair trade among nations

D. Providing short-term BOP support

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Correct Answer: Option C

Explanation:
The WTO aims to promote free and fair international trade by reducing trade barriers, settling disputes and providing a framework for trade negotiations.

This question belongs to: Economy GK Economy Set 1

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