Trivia Questions on Indian Economy! Quiz

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| By Tanmay Shankar

Tanmay Shankar

Community Contributor

Quizzes Created: 491 | Total Attempts: 1,781,791

Questions: 10 | Attempts: 793 | Updated: Feb 12, 2024

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Trivia Questions On Indian Economy! Quiz - Quiz

The Indian Economy Quiz offers a fascinating exploration into the economic landscape of India. Through a series of questions, participants can delve into various aspects, including GDP, fiscal policies, trade dynamics, and economic reforms. It provides a platform to test and enhance one's understanding of India's economic structure, challenges, and opportunities. With its diverse sectors and vibrant market, the Indian economy serves as a compelling subject for analysis and discussion.

This quiz not only educates but also encourages individuals to stay informed about economic developments and trends shaping India's future. Whether you're a student, a professional, or simply curious about Read moreeconomics, the Indian Economy Quiz promises an engaging and enlightening experience, shedding light on the complexities and nuances of one of the world's fastest-growing economies.

Indian Economy Questions and Answers

1.

If interest payment is deducted from the fiscal deficit, then the balance is _________________.
- A.
  
  Primary deficit
- B.
  
  Budgetary deficit
- C.
  
  Revenue deficit
- D.
  
  Monetary deficit
Correct Answer
A. Primary deficit

Explanation
When interest payment is deducted from the fiscal deficit, the remaining amount is called the primary deficit. The fiscal deficit represents the total amount by which a government's expenditures exceed its revenues, including interest payments. By subtracting the interest payment from the fiscal deficit, we are left with the primary deficit, which indicates the extent to which the government's non-interest expenditures exceed its revenues. Therefore, the correct answer is primary deficit.

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2.

Which is the characteristic of a tax?
- A.
  
  Tax is a payment for government service.
- B.
  
  Tax is a compulsory payment.
- C.
  
  Tax is voluntary.
- D.
  
  To get benefit for a tax is compulsory.
Correct Answer
B. Tax is a compulsory payment.

Explanation
The characteristic of a tax is that it is a compulsory payment. This means that individuals or businesses are required by law to pay taxes to the government. Unlike voluntary payments or payments made in exchange for a specific government service, taxes are mandatory and failure to pay them can result in penalties or legal consequences.

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3.

Which government income is included in the revenue budget?
- A.
  
  Tax-revenue
- B.
  
  Non-tax-revenue
- C.
  
  Both of above
- D.
  
  None of the above
Correct Answer
C. Both of above

Explanation
Both tax-revenue and non-tax revenue are included in the revenue budget. Tax-revenue refers to the income generated from taxes imposed on individuals and businesses, such as income tax, sales tax, and corporate tax. Non-tax revenue, on the other hand, includes income from sources other than taxes, such as fees, fines, grants, and dividends. Including both types of income in the revenue budget allows the government to accurately assess its total income and plan its expenditures accordingly.

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4.

Which is included in the Capital budget?
- A.
  
  Income received from public borrowings.
- B.
  
  Income received from tax-sources.
- C.
  
  Income received from non-tax sources.
- D.
  
  All of the above
Correct Answer
A. Income received from public borrowings.

Explanation
The correct answer is income received from public borrowings. Capital budget includes the income received from public borrowings as it is used for long-term investments and expenditures such as infrastructure development, acquisition of assets, and other capital projects. Income received from tax-sources and non-tax sources, on the other hand, are part of the revenue budget which includes income and expenses for the day-to-day functioning of the government.

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5.

Which is not included in the principles of public expenditure as developed by Findley Shirras ?
- A.
  
  Principle of Economy
- B.
  
  Principle of Sanction
- C.
  
  Principle of Elasticity
- D.
  
  Principle of Surplus
Correct Answer
C. Principle of Elasticity

Explanation
The principle of elasticity is not included in the principles of public expenditure as developed by Findley Shirras. The principle of economy emphasizes the need for efficient and cost-effective use of public funds. The principle of sanction states that public expenditure should be authorized by law. The principle of surplus suggests that government spending should be limited to the amount of revenue available. However, the principle of elasticity, which refers to the ability of public expenditure to adapt to changing circumstances, is not mentioned in Shirras' principles.

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6.

Which of the following is the largest significant factor in revenue expenditure of the Central Government?
- A.
  
  Defense Expenditure
- B.
  
  Subsidy
- C.
  
  Interest Payment
- D.
  
  Salary
Correct Answer
C. Interest Payment

Explanation
Interest payment is the largest significant factor in revenue expenditure of the Central Government because it refers to the amount of money that the government pays as interest on its borrowings. As the government often borrows money to finance its expenditures, the interest payment on these borrowings becomes a significant portion of its revenue expenditure. This is because the government has to allocate a substantial amount of its revenue to meet these interest obligations, which can have a significant impact on its overall expenditure.

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7.

In comparison to revenue deficit; the size of fiscal deficit is always ____________.
- A.
  
  Higher
- B.
  
  Smaller
- C.
  
  Similar
- D.
  
  Uncertain
Correct Answer
A. Higher

Explanation
The size of fiscal deficit is always higher compared to revenue deficit because fiscal deficit takes into account both revenue deficit and capital expenditure. Revenue deficit only considers the excess of government's revenue expenditure over its revenue receipts, while fiscal deficit includes revenue deficit as well as the borrowing and other liabilities of the government. Therefore, fiscal deficit is always larger than revenue deficit.

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8.

What is CENVAT?
- A.
  
  Direct Tax
- B.
  
  Indirect Tax
- C.
  
  Development Planning
- D.
  
  None of the above
Correct Answer
B. Indirect Tax

Explanation
CENVAT refers to Central Value Added Tax, which is an indirect tax levied on the production, sale, and consumption of goods and services. It is a tax that is collected by businesses and passed on to the end consumer. Therefore, the correct answer is Indirect Tax.

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9.

Where is the Indian Diamond Institute (IDI) established?
- A.
  
  New Delhi
- B.
  
  Mumbai
- C.
  
  Surat
- D.
  
  Jaipur
Correct Answer
C. Surat

Explanation
The Indian Diamond Institute (IDI) is located in Surat, Gujarat, India. It serves as a premier institution for education and research in the diamond industry, offering courses in diamond grading, gemology, jewelry design, and manufacturing. The institute plays a significant role in training professionals and advancing the diamond trade in India.

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10.

What is the nature of income tax in India?
- A.
  
  Proportional
- B.
  
  Progressive
- C.
  
  Regressive
- D.
  
  None of the above
Correct Answer
B. Progressive

Explanation
The nature of income tax in India is progressive. This means that as a person's income increases, the tax rate also increases. The tax rates are structured in a way that higher-income individuals are taxed at a higher rate, while lower-income individuals are taxed at a lower rate. This system is designed to ensure that those who earn more contribute a larger proportion of their income towards taxes, while those who earn less are burdened with a lower tax liability.

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Current Version
Feb 12, 2024

Quiz Edited by
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Sep 05, 2011

Quiz Created by
Tanmay Shankar

Trivia Questions On Indian Economy! Quiz

Indian Economy Questions and Answers

If interest payment is deducted from the fiscal deficit, then the balance is _________________.

Which is the characteristic of a tax?

Which government income is included in the revenue budget?

Which is included in the Capital budget?

Which is not included in the principles of public expenditure as developed by Findley Shirras ?

Which of the following is the largest significant factor in revenue expenditure of the Central Government?

In comparison to revenue deficit; the size of fiscal deficit is always ____________.

What is CENVAT?

Where is the Indian Diamond Institute (IDI) established?

What is the nature of income tax in India?