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Prelims-IAS –ECONOMICS MCQ-15

1..Which of the following expenditures by the central government is/are part of revenue expenditure?

  1. Pension to the judges of high courts.
  2. Loan given to a PSU.
  3. Expenditure on building a warship.
  4. Assistance given to state governments to meet their plan expenditure.

Select the correct answer from the code given below.
(a) 1, 2 and 3 only
(b) 1, 3 and 4 only
(c) 1 and 4 only
(d) None of the above


2..Consider the following statements:

  1. A low primary deficit along with high fiscal deficit indicates that the interest liabilities of the government are low.
  2. A low effective revenue deficit is a clear indicator that the government is spending more on creation and maintenance of capital assets.

Which of the statement(s) given above is/are incorrect?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2


3..Which one of the following statements is correct?

Fiscal Responsibility and Budget Management Act (FRBMA) concerns?
(a) fiscal deficit only
(b) revenue deficit only
(c) both fiscal and revenue deficit
(d) neither fiscal deficit nor revenue deficit


4..With reference to ‘Effective Revenue Deficit’, consider the following statements:

  1. It was introduced on the recommendation of 13th Finance Commission.
  2. It includes all the revenue expenditure done in the form of grants for creation of capital assets.
  3. Grants given under MNREGA to build capital assets like roads and ponds forms part of it.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 and 3 only
(c) 3 only
(d) None


5..Identify the correct option which indicates the correct match between two columns for the following table.

List 1
List 2
A. Fiscal deficit
1. Excess of total Expenditure over Total Receipts
B. Budget deficit
2. Excess of Revenue Expenditure over Revenue Receipts
C. Revenue : deficit
3. Excess of Total Expenditure over Total Receipts less borrowings
D. Primary deficit
4. Excess of Total Expenditure over Total Receipts less borrowings and and Interest Payment
(a) A-3 B-1 C-2 D-4            (b) A-4 B-3 C-2 D-1              (c) A-1 B-3 C-2 D-4               (d) A-3 B-1 C-4 D-2

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