Public Expenditure MCQs Quiz Multiple Choice Questions & Answers

1. According to HC Adams public expenditure has to perform the

1. Protective Function
2. Commercial Function
3. Developmental Function
4. All of the above

2. An empirical law to the effect of growing public expenditure was propounded by

1. Wagner
2. Peacock
3. Wiseman
4. None of these

3. Bharat Nirman, MGNREGA are examples of

1. Plan Expenditure
2. Non-Plan Expenditure
3. Capital Expenditure
4. None of the above

4. Debts that are repaid at some specific future date are known as

1. Redeemable debts
2. Irredeemable debts
3. Treasury Bill
4. None of the above

5. Debts which have to be paid at some specific future date are known as

1. Redeemable Debts
2. Irredeemable Debts
3. Treasury
4. None of the above

6. External debts can be raised from

1. Individuals
2. RBI
3. Commercial Banks
4. World Bank

7. External loans are raised from

1. IDBI
2. ICICI
3. RBI
4. WTO

8. Fiscal federalism deals with

1. The division of governmental functions
2. Financial relations among levels of government
3. Proper allocation of Resources
4. All of the above

9. Interest payments are a part of

1. Development Expenditure
2. Non-Development Expenditure
3. Capital Expenditure
4. All of the above

10. Loans taken by the government for purpose of war, earthquakes for covering budget deficit are

1. Productive Debts
2. Unproductive
3. Voluntary Debts
4. None of the above

11. Pick out the factor which is not a part of revenue budget

1. Current consumption expenditure on commodities
2. Current consumption expenditure on services
3. Transfer payments
4. Expenditure on machinery

12. Pick out the feature which is not applicable to a good budget

1. Comprehensiveness
2. Clarity
3. Objectivity
4. Lengthy

13. Pick out the feature which is not true in the case of repudiation of debt

1. Simplest method of liquidating a debt
2. It will increase the credibility of the government
3. Debtors may face loss
4. It is discriminating

14. Pick out the feature which is not true of a capital levy

1. For paying off unproductive debt
2. It is paid by those who earn huge profits
3. It does not follow the principle of equity
4. It helps to fight inflation

15. Pick out the item which is not a part of capital budget

1. Market Borrowings
2. Sale of Treasury Bulls
3. Revenue from Industry
4. Net Small Savings

16. Pick out the item which is not a part of non-plan expenditure on the revenue side

1. Defence
2. Central Assistance to states
3. Subsidies
4. None of the above

17. Pick out the item which is not a part of non-tax revenue

1. Interest Receipts
2. Dividends
3. Customs
4. Profits

18. Pick out the item which is not a part of tax revenue

1. Interest
2. Corporate Tax
3. Excise
4. Customs

19. Pick out the item which is not a part of the plan expenditure

1. Agriculture
2. Industry
3. Social Services
4. Defence

20. Pick out the method which is not a part of redemption

1. Sinking Fund
2. Surplus Budget
3. Terminal Annuities
4. Refunding

21. Productive debts are utilized for

1. Transfer payments in form of subsidies
2. They are raised for financing wars
3. They add to productive capacity of the economy
4. special incentives to weaker sections

22. Public Expenditure refers to

1. Government Expenditure
2. Private Expenditure
3. Private Expenditure
4. None of the above

23. The budget presented wken elections are due is known as

1. Tentative Budget
2. Proposed Budget
3. Zero Budget
4. Lame Duck Budget

24. The defence expenditure minimizes the possibility of

1. External threats
2. Internal threats
3. Terrorism
4. All of the above

25. The finance commissions role is to

1. Propose New Taxes
2. To Abolish Old taxes
3. To review and modify arrangements
4. None of the above

26. The full form of FRBM Act 2003 is

1. Fiscal Regulation and Budget Management Act, 2003
2. Fiscal Regulation and Banking Management Act, 2003
3. Fiscal Responsibility and Budget Management Act, 2003
4. Financial Responsibility and Budget Management Act, 2003

27. The main pillars of institutional framework to deal with centre-state financial relations in India is

1. Finance Commission
2. Planning Commission
3. National Development Council
4. All of the above

28. The major objectives of public expenditure are

1. Economic Growth
2. Maintenance of Defence
3. Social Welfare
4. All of the above

29. The method by which a certain portion matures every year as decided by the lottery system

1. Sinking Fund
2. Surplus Revenues
3. Terminal Annuities
4. None of the above

30. The number of sections of a good budget are

1. Two
2. Three
3. Five
4. Eight

31. The term fiscal federalism was introduced by

1. Dalton
2. Seligman
3. Musgrave
4. None of the above

32. The term Fiscal Federalism was introduced by

1. Musgrave
2. Oates
3. Dalton
4. None of the above

33. The theory of fiscal federalism assumes

1. A federal system of government can be efficient and effective in solving problems
2. A federal government will be able to bring about economic stability allocation of resources
3. Since states and localities are not equal in their income, federalism is helpful
4. All of the above

34. The treasury bills are issued by RBI on behalf of the government

1. Short-term public debt
2. Medium-term public debt
3. Long-term public
4. None of the above

35. Transfer payments include

1. Old age pension
2. Subsidies
3. Interest on public debt
4. All of the above

36. Under Article 246 and Seventh Schedule, List I invest the Union with functions of

1. National Importance
2. State Importance
3. Local Importance
4. All of the above

37. Under Article 246 and Seventh Schedule, List II invest the State with functions of

1. National Importance
2. Defence
3. External Affairs
4. Public Health

38. When budget revenue equals expenditure the budget shows

1. Balance
2. Deficit
3. Surplus
4. None of the above

39. Which is / are the advantages of redemption of debt

1. Saves the government from bankruptcy
2. Reduces Cost
3. Saves future generation from the pressure of public debt
4. All of the above

40. Which of the following is not an objective of public debt management

1. Loans at low cost
2. Repayment over a long period
3. Stabilisation of the level of economic activity
4. Economic growth

41. Which of the following is not true of public budget?

1. A budget contains only proposals of taxation
2. It refers to the policies of the government
3. It contains the estimated receipts and proposed expenditure
4. It reflects the programmes of the government

42. Which of the following is the most comprehensive measure of budgetary imbalances?

1. Fiscal Deficit
2. Revenue Deficit
3. Primary Deficit
4. All of the above