laboursonline – MCQs, Mock Tests | ICSE XII MCQ Questions for Class 12 Economics Set-6

The classical theory is based on the assumption of:

1. Say’s the law of market
2. Flexibility in wage rates
3. Flexibility in interest rate
4. All of the above

✅ Correct Answer: 4

“Supply creates its own demand”. This statement was given by the economist:

1. Keynes
2. Pigou
3. J. B.Say
4. Adam Smith

✅ Correct Answer: 3

When an economy they’re to save all its extra income then investment calculation will be:

1. 1
2. Uncertain
3. 0
4. Infinite

✅ Correct Answer: 1

The relation between consumption and savings are:

1. Inverse
2. Direct
3. Inverse and direct both
4. Neither inverse nor direct.

✅ Correct Answer: 1

Income and employment are determined by:

1. Total demand
2. Total supply
3. Total demand and total supply both
4. By market demand

✅ Correct Answer: 3

Which monetary measure is to be adopted in correcting Inflationary

1. Increase in Bank Rate
2. Selling of Securities in Open Market
3. Increase in Cash Reserve Ratio
4. All the above

✅ Correct Answer: 4

Which fiscal measure is to be adopted in correcting the Inflationary Gap?

1. Reduction in Public Expenditure
2. Increase in taxes
3. Increase in Public debt
4. All of these

✅ Correct Answer: 4

An annual statement of the estimated receipts and expenditure of the government over the fiscal year is known as

1. Budget
2. Income estimates
3. Account
4. Expenditure

✅ Correct Answer: 1

Which of the following is an example of direct tax?

1. VAT
2. Excise duty
3. Entertainment tax
4. Wealth tax

✅ Correct Answer: 4

What is the period of a fiscal year?

1. 1 April to 31 March
2. 1 January to 31 December
3. 1 March to 28 February
4. None of these

✅ Correct Answer: 1

When government spends more than it collects by way of revenue, it incurs ______

1. Budget surplus
2. Budget deficit
3. Capital expenditure
4. Revenue expenditure

✅ Correct Answer: 2

The fiscal deficit is the difference between the government’s total expenditure and its total receipts excluding ______

1. Interest
2. Taxes
3. Spending
4. Borrowings

✅ Correct Answer: 4

Which of the following is the component of a budget?

1. Fiscal budget
2. Capital budget
3. Both of these
4. None of these

✅ Correct Answer: 3

What is the annual statement of the government’s fiscal revenue and fiscal expenditure known?

1. Budget
2. Fiscal Budget
3. Capital Budget
4. All of these

✅ Correct Answer: 2

How many types of revenue receipts are there?

1. 2
2. 3
3. 4
4. 6

✅ Correct Answer: 1

The amount collected by the government as taxes and duties is known as _______

1. Capital receipts
2. Tax revenue receipts
3. Non-tax revenue receipts
4. All of these

✅ Correct Answer: 2

The amount collected by the government in the form of interest, fees, and dividends is known as ________

1. Tax-revenue receipts
2. Capital receipts
3. Non-tax revenue receipts
4. None of these

✅ Correct Answer: 3

Borrowing in the government budget is:

1. Revenue deficit
2. Fiscal deficit
3. Primary deficit
4. Deficit in taxes

✅ Correct Answer: 2

The non-tax revenue in the following is:

1. Export duty
2. Import duty
3. Dividends
4. Excise

✅ Correct Answer: 3

The primary deficit in a government budget will be zero, when _______

1. Revenue deficit is zero
2. Net interest payments are zero
3. Fiscal deficit is zero
4. Fiscal deficit is equal to interest payment

✅ Correct Answer: 4

Direct tax is called direct because it is collected directly from:

1. The producers on goods produced
2. The sellers on goods sold
3. The buyers of goods
4. The income earners

✅ Correct Answer: 4

Financial Year in India is:

1. April I to March 31
2. January 1 to December 31
3. October 1 to September 30
4. None of the above

✅ Correct Answer: 1

Which objectives government attempts to obtain by Budget

1. To Promote Economic Development
2. Balanced Regional Development
3. Redistribution of Income and Wealth
4. All the above

✅ Correct Answer: 4

Which is a component of Budget?

1. Budget Receipts
2. Budget Expenditure
3. Both (a) and (b)
4. None of the above

✅ Correct Answer: 3

Which is a component of the Budget Receipt?

1. Revenue Receipt
2. Capital Receipt
3. Both (a) and (b)
4. None of the above

✅ Correct Answer: 3

Tax revenue of the Government includes :

1. Income Tax
2. Corporate Tax
3. Excise Duty
4. All of these

✅ Correct Answer: 4

Which is included in the Direct Tax?

1. Income Tax
2. Gift Tax
3. Both (a) and (b)
4. Excise Duty

✅ Correct Answer: 3

Which is included in Indirect Tax?

1. Excise Duty
2. Sales Tax
3. Both (a) and (b)
4. Wealth Tax

✅ Correct Answer: 3

The expenditures which do not create assets for the government is called :

1. Revenue Expenditure
2. Capital Expenditure
3. Both (a) and (b)
4. None of the above

✅ Correct Answer: 1

Direct tax is :

1. Income Tax
2. Gift Tax
3. Both (a) and (b)
4. None of these

✅ Correct Answer: 3

In India, one rupee note is issued by:

1. Reserve Bank of India
2. Finance Ministry of Government of India
3. State Bank of India
4. None of these

✅ Correct Answer: 2

Capital budget consist of:

1. Revenue Receipts and Revenue Expenditure
2. Capital Receipts and Capital Expenditure
3. Direct and Indirect Tax
4. None of these

✅ Correct Answer: 2

Which of the following is an indirect tax?

1. Excise Duty
2. Sales Tax
3. Custom Duty
4. All of these

✅ Correct Answer: 4

Which type of expenditure is made in bridge construction?

1. Capital Expenditure
2. Revenue Expenditure
3. Both (a) and (b)
4. None of the above

✅ Correct Answer: 1

Which of the following budget is suitable for developing economies?

1. Deficit Budget
2. Balanced Budget
3. Surplus Budget
4. None of these

✅ Correct Answer: 1

What is the duration of a Budget?

1. Annual
2. Two Years
3. Five Years
4. Ten Years

✅ Correct Answer: 1

Which of the following is included in fiscal policy?

1. Public Expenditure
2. Tax
3. Public Debt
4. All of these

✅ Correct Answer: 4

Which of the following is the capital expenditure of the government?

1. Interest Payment
2. Purchase of House
3. Expenses on Machinery
4. All of the above

✅ Correct Answer: 1

The budget may include:

1. Revenue Deficit
2. Fiscal Deficit
3. Primary Deficit
4. All of these

✅ Correct Answer: 4

Which of the following statement is true?

1. Fiscal deficit is the difference between total expenditure and total receipts
2. Primary deficit is the difference between total receipt and interest payments
3. Fiscal deficit is the sum of primary deficit and interest payment
4. All of these

✅ Correct Answer: 3

Budget:

1. is a description of income-expenditure of government
2. is a document of the economic policy of the government
3. is a description of non-programs of the government
4. All of these

✅ Correct Answer: 4

In an unbalanced budget:

1. Income is greater than expenditure
2. Expenditure is higher relative to income
3. Deficit is covered by loans or printing of notes
4. Only (b) and (c)

✅ Correct Answer: 4

Which is included in indirect tax?

1. Income tax
2. Wealth tax
3. Excise Duty
4. Gift tax

✅ Correct Answer: 3

Which one of the following is a pair of direct tax?

1. Excise duty and Wealth Tax
2. Service Tax and Income Tax
3. Excise Duty and Service Tax
4. Wealth Tax and Income Tax

✅ Correct Answer: 4

Which of the following is not a revenue receipt?

1. Recovery of Loans
2. Foreign Grants
3. Profits of Public Enterprise
4. Wealth Tax

✅ Correct Answer: 1

Which of the following is a correct measure of the primary deficit?

1. Fiscal deficit minus revenue deficit
2. Revenue deficit minus interest payments
3. Fiscal deficit minus interest payments
4. Capital expenditure minus revenue expenditure

✅ Correct Answer: 3

The duration of the Government budget is:

1. 5 years
2. 2 years
3. 1 year
4. 10 years

✅ Correct Answer: 3

Budget speech in Lok Sabha is given by:

1. President
2. Prime Minister
3. Finance Minister
4. Home Minister

✅ Correct Answer: 3

Professional tax is imposed by:

1. Central Government
2. State Government
3. Municipal Corporation
4. Gram Panchayat

✅ Correct Answer: 2

From the following which is included in the direct tax:

1. Income Tax
2. Gift Tax
3. Both (a) and (b)
4. Excise Tax

✅ Correct Answer: 3