Economy, Fiscal Policy, UPSC PYQ

Which among the following steps is most likely to be taken at the time of an economic recession?

Cut in tax rates accompanied by increase in interest rate.

Increase in expenditure on public projects.

Increase in tax rates accompanied by reduction of interest rate

Reduction of expenditure on public projects

Consider the following :

1. Demographic performance
2. Forest and ecology
3. Governance reforms
4. Stable government
5. Tax and fiscal efforts

For the horizontal tax devolution, the Fifteenth Finance Commission used how many of the above as criteria other than population area and income distance?

Only two

Only three

Only four

All five

Which one of the following is likely to be the most inflationary in its effects?

Repayment of public debt

Borrowing from the public to finance a budget deficit

Borrowing from the banks to finance a budget deficit

Creation of new money to finance a budget deficit

Which one of the following situations best reflects “Indirect Transfers” often talked about in media recently with reference to India?

An Indian company investing in a foreign enterprise and paying taxes to the foreign country on the profits arising out of its investment

A foreign company investing in India and paying taxes to the country of its base on the profits arising out of its investment

An Indian company purchases tangible assets in a foreign country and sells such assets after their value increases and transfers the proceeds to India

A foreign company transfers shares and such shares derive their substantial value from assets located in India

Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?

Diversion of resources to the purchase of real estate and investment in luxury housing

Investment in unproductive activities and purchase of precious stones, jewellery, gold, etc.

Large donations to political parties and growth of regionalism

Loss of revenue to the State Exchequer due to tax evasion.

With reference to the Indian economy, consider the following statements:
1. A share of the household financial savings goes towards government borrowings.
2. Dated securities issued at market-related rates in auctions form a large component of internal debt.

Which of the above statements is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

With reference to the expenditure made by an organization or a company, which of the following statements is/are correct?
1. Acquiring new technology is capital expenditure.
2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure.

Select the correct answer using the code given below:

1 only

2 only

Both 1 and 2

Neither 1 and 2

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