CUET Economics - Macro - Government Budget | Free Questions - Page 3

Q1:

2025: 31 May Shift 1

Macro

>

Government Budget

Hard

Which of the following statements about national debt are correct?

(A) Deficit can be thought of as a flow variable which adds to the stock of debt

(B) The government finances debt through taxation, borrowing or printing money

(C) Debt owned to foreigners involves a higher burden than debt owned to domestic agents and institutions

(D) Government's debt financing crowds out private borrowers in financial markets

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 2

Correct Answer

Explanation

Q2:

2025: 31 May Shift 1

Macro

>

Government Budget

Easy

When the government has taken certain decision that can financed through the budget and can be used without any direct payment. Such move is known as..........

Public Provision.
Public Production.
Public Goods.
Private Goods.

Public Provision.

Public Production.

Public Goods.

Private Goods.

Correct Answer

Option 1

Correct Answer

Explanation

Q3:

2025: 31 May Shift 1

Macro

>

Government Budget

Easy

Defense of the nation is a service provided by our armed forces. This service is.

Non -Public good which is non-rival and non excludable in consumption.
Public good which is non-rival and non excludable in consumption.
Non -Public good which is rival and non-excludable in consumption.
Public good which is rival and non-excludable in consumption.

Non -Public good which is non-rival and non excludable in consumption.

Public good which is non-rival and non excludable in consumption.

Non -Public good which is rival and non-excludable in consumption.

Public good which is rival and non-excludable in consumption.

Correct Answer

Option 2

Correct Answer

Explanation

Q4:

2025: 30 May Shift 2

Macro

>

Government Budget

Medium

Net borrowing at home included which of the following?

directly borrowed from the public through debt instruments.

Borrowing from Federal body of banking system.

Gross fiscal deficit.

Borrowing from abroad through debt instruments.

Correct Answer

Option 1

Correct Answer

Explanation

Q5:

2025: 30 May Shift 2

Macro

>

Government Budget

Medium

Which of the following is the best example of Public provision and Public Production respectively?

Opening up of 11 Central University in next 5 years worth of 20,000 cr from annual budget 2024-25, BSNL.

Airtel, BSNL.

AIIMS, Coal India Limited.

5 lacs brick homes to people from 'Below Poverty Line' strata, Loan of up to 10 lac to women entrepreneurs.

Correct Answer

Option 1

Correct Answer

Explanation

Q6:

2025: 30 May Shift 2

Macro

>

Government Budget

Medium

The Fiscal Responsibility and Budget Management Act 2003 mandates the central government to lay before both houses of parliament. Which of the three statements along with the Annual Financial Statement?

Medium Term Fiscal Policy Statement, Fiscal Policy Strategy Management, and The Macroeconomic Framework Statement.

Medium Term Fiscal Policy Statement, Quarterly Macroeconomic Policy, and Microeconomic Accounting standard.

Fiscal Policy Review Report , Fiscal Policy Recommended Report, Field Survey on Macroeconomic Benchmarks.

Annual Stock Performance Data, Field Surveys on Unemployment Report, Citizen Feedback on Economy Data.

Correct Answer

Option 1

Correct Answer

Explanation

Q7:

2025: 30 May Shift 2

Macro

>

Government Budget

Medium

Which of the following best explains the constitutional aspect of Goods and Services Tax implementation in India?

104th Constitutional Ammendment and Introduction of Article 26A.

101 Constitutional Amendment and Introduction of Article 246A.

101st Constitutional Amendment and Introduction of Article 26A.

104th Constitutional Ammendment and Introduction of Article 24A.

Correct Answer

Option 2

Correct Answer

Explanation

Q8:

2025: 30 May Shift 1

Macro

>

Government Budget

Medium

Arrange the steps involved in preparation of the government budget.

(A) Discussion and approval by the parliament.

(B) Preparation of budget by the Ministry of Finance.

(C) Implementation by the government.

(D) Approval by the Cabinet.

Choose the correct answer from the options given below:

(A), (D), (B), (C)

(B), (D), (A), (C)

(B), (A), (D), (C)

(A), (B), (D), (C)

Correct Answer

Option 2

Correct Answer

Explanation

Q9:

2025: 30 May Shift 1

Macro

>

Government Budget

Medium

Revenue deficit in the government budget can be managed through:-

(A) Borrowings from RBI.

(B) Disinvestment.

(C) Increasing Subsidy.

(D) Borrowings from the general public.

Choose the correct answer from the options given below:

(A), (B) and (C) only

(A), (B) and (D) only

(A) and (D) only

(B), (C) and (D) only

Correct Answer

Option 2

Correct Answer

Explanation

Q10:

2025: 30 May Shift 1

Macro

>

Government Budget

Medium

Identify which of the following is an example of non-debt capital receipts.

Recovery of loans.

Financial aid from MNC for victims in a flood affected area.

Borrowings from IMF.

Dividend paid by State Bank of India to the Government.

Correct Answer

Option 1

Correct Answer

Explanation

Q11:

2025: 29 May Shift 2

Macro

>

Government Budget

Medium

Match List-I with List-II

List-I	List-II
(A) Primary deficit	(I) Net borrowing at home + Borrowing from RBI + Borrowing from abroad
(B) Fiscal deficit	(II) Fiscal deficit – Net interest liabilities
(C) Revenue deficit	(III) Revenue expenditure – Revenue receipts
(D) Revenue Expenditure	(IV) Plan and non-plan expenditure

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (II), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q12:

2025: 29 May Shift 2

Macro

>

Government Budget

Easy

A shock absorber which makes disposable income, and thus consumer spending, less sensitive to fluctuations in GDP is called.

Discretionary fiscal policy.

Government expenditure multiplier.

Automatic stabiliser.

Tax multiplier.

Correct Answer

Option 3

Correct Answer

Explanation

Q13:

2025: 29 May Shift 2

Macro

>

Government Budget

Easy

The government policy affecting the personal disposable income of households by making transfers and collecting taxes is known by...........

Redistribution function.

Stabilization function.

Fiscal policy.

Taxation.

Correct Answer

Option 1

Correct Answer

Explanation

Q14:

2025: 29 May Shift 2

Macro

>

Government Budget

Easy

When goods are financed through the budget and can be used without any direct payment, they are known as.......

Public goods.

Public provision.

Public production.

Private goods.

Correct Answer

Option 2

Correct Answer

Explanation

Q15:

2025: 29 May Shift 1

Macro

>

Government Budget

Medium

Match List-I with List-II

List-I	List-II
(A) Capital receipts	(I) Excess of total expenditure over and above all total receipts of the government
(B) Corporate saving	(II) Borrowings of the government
(C) Budget deficit	(III) Retained earnings of firm
(D) Fiscal deficit	(IV) Create a liability for the government

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (IV), (B) - (III), (C) - (I), (D) - (II)

Correct Answer

Option 4

Correct Answer

Explanation

Q16:

2025: 29 May Shift 1

Macro

>

Government Budget

Medium

Which of the following are features of fiscal policy?

(A) Taxes and government spending are tools of fiscal policy.

(B) It is implemented by the central bank.

(C) It influences aggregate demand.

(D) It involves adjustments in public debt.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (C) and (D) only

(A), (B), (C) and (D)

(A) and (C) only

Correct Answer

Option 2

Correct Answer

Explanation

Q17:

2025: 29 May Shift 1

Macro

>

Government Budget

Medium

Which of the following can help to reduce the Fiscal Deficit?

Increasing Subsidies.

Increasing proceeds from the sale of PSUs.

Investing in improving public goods.

Decreasing the burden and incidence of tax.

Correct Answer

Option 2

Correct Answer

Explanation

Q18:

2025: 29 May Shift 1

Macro

>

Government Budget

Easy

Goods and Services Tax became operational in the year:

2016

2018

2017

2014

Correct Answer

Option 3

Correct Answer

Explanation

Q19:

2025: 28 May Shift 2

Macro

>

Government Budget

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

GST: One Nation, One Tax, One Market

Goods and Service Tax (GST) is the single comprehensive indirect tax, operational from 2017, on supply of goods and services, right from the manufacturer/service provider to the consumer. It is a destination based consumption tax with facility of Input Tax Credit in the supply chain. It is applicable throughout the country with one rate for one type of goods/service. It has amalgamated a large number of Central and State taxes and cesses. It has replaced large number of taxes on goods and services levied on production/sale of goods or provision of service. Under GST, the tax is discharged at every stage of supply and the credit of tax paid at the previous stage is available for set off at the next stage of supply of goods and/or services. It has replaced various types of taxes/cesses, levied by the Central and State/UT Governments. Under GST, there are six standard rates applied on supply of all goods and/or services across the country. The 101th Constitution Amendment Act introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. GST has simplified the multiplicity of taxes, facilitated freedom of movement, created a common market in the country, standardized laws, procedures and rates of taxes across the country, aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets.

The month in which the Goods and Services Tax became operational.

May

June

July

August

Correct Answer

Option 3

Correct Answer

Explanation

Q20:

2025: 28 May Shift 2

Macro

>

Government Budget

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

GST: One Nation, One Tax, One Market

Goods and Service Tax (GST) is the single comprehensive indirect tax, operational from 2017, on supply of goods and services, right from the manufacturer/service provider to the consumer. It is a destination based consumption tax with facility of Input Tax Credit in the supply chain. It is applicable throughout the country with one rate for one type of goods/service. It has amalgamated a large number of Central and State taxes and cesses. It has replaced large number of taxes on goods and services levied on production/sale of goods or provision of service. Under GST, the tax is discharged at every stage of supply and the credit of tax paid at the previous stage is available for set off at the next stage of supply of goods and/or services. It has replaced various types of taxes/cesses, levied by the Central and State/UT Governments. Under GST, there are six standard rates applied on supply of all goods and/or services across the country. The 101th Constitution Amendment Act introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. GST has simplified the multiplicity of taxes, facilitated freedom of movement, created a common market in the country, standardized laws, procedures and rates of taxes across the country, aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets.

The standard rate which is applied to the supply of goods and/or services across the country under the GST.

18 percent.

15 percent.

13 percent.

11 percent.

Correct Answer

Option 1

Correct Answer

Explanation

Q21:

2025: 28 May Shift 2

Macro

>

Government Budget

Easy

Comprehension:

Read the passage carefully and answer the questions based on the passage:

GST: One Nation, One Tax, One Market

Goods and Service Tax (GST) is the single comprehensive indirect tax, operational from 2017, on supply of goods and services, right from the manufacturer/service provider to the consumer. It is a destination based consumption tax with facility of Input Tax Credit in the supply chain. It is applicable throughout the country with one rate for one type of goods/service. It has amalgamated a large number of Central and State taxes and cesses. It has replaced large number of taxes on goods and services levied on production/sale of goods or provision of service. Under GST, the tax is discharged at every stage of supply and the credit of tax paid at the previous stage is available for set off at the next stage of supply of goods and/or services. It has replaced various types of taxes/cesses, levied by the Central and State/UT Governments. Under GST, there are six standard rates applied on supply of all goods and/or services across the country. The 101th Constitution Amendment Act introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. GST has simplified the multiplicity of taxes, facilitated freedom of movement, created a common market in the country, standardized laws, procedures and rates of taxes across the country, aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets.

Under Article 246A, which was not enacted for GST?

Central Goods and Service Tax Act.

Integrated Goods and Service Tax Act.

States Goods and Service Tax Act.

Regional Goods and Service Tax.

Correct Answer

Option 4

Correct Answer

Explanation

Q22:

2025: 28 May Shift 2

Macro

>

Government Budget

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

GST: One Nation, One Tax, One Market

Goods and Service Tax (GST) is the single comprehensive indirect tax, operational from 2017, on supply of goods and services, right from the manufacturer/service provider to the consumer. It is a destination based consumption tax with facility of Input Tax Credit in the supply chain. It is applicable throughout the country with one rate for one type of goods/service. It has amalgamated a large number of Central and State taxes and cesses. It has replaced large number of taxes on goods and services levied on production/sale of goods or provision of service. Under GST, the tax is discharged at every stage of supply and the credit of tax paid at the previous stage is available for set off at the next stage of supply of goods and/or services. It has replaced various types of taxes/cesses, levied by the Central and State/UT Governments. Under GST, there are six standard rates applied on supply of all goods and/or services across the country. The 101th Constitution Amendment Act introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. GST has simplified the multiplicity of taxes, facilitated freedom of movement, created a common market in the country, standardized laws, procedures and rates of taxes across the country, aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets.

Goods and Service Tax, the single comprehensive indirect tax on all goods and services, extends the principle of one of the following

Central Sales Taxation.

Central Excise Duty.

Value- added taxation.

Sales Taxation.

Correct Answer

Option 3

Correct Answer

Explanation

Q23:

2025: 28 May Shift 2

Macro

>

Government Budget

Medium

Comprehension:

Read the passage carefully and answer the questions based on the passage:

GST: One Nation, One Tax, One Market

Goods and Service Tax (GST) is the single comprehensive indirect tax, operational from 2017, on supply of goods and services, right from the manufacturer/service provider to the consumer. It is a destination based consumption tax with facility of Input Tax Credit in the supply chain. It is applicable throughout the country with one rate for one type of goods/service. It has amalgamated a large number of Central and State taxes and cesses. It has replaced large number of taxes on goods and services levied on production/sale of goods or provision of service. Under GST, the tax is discharged at every stage of supply and the credit of tax paid at the previous stage is available for set off at the next stage of supply of goods and/or services. It has replaced various types of taxes/cesses, levied by the Central and State/UT Governments. Under GST, there are six standard rates applied on supply of all goods and/or services across the country. The 101th Constitution Amendment Act introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. GST has simplified the multiplicity of taxes, facilitated freedom of movement, created a common market in the country, standardized laws, procedures and rates of taxes across the country, aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets.

Which one attracts both GST and Central Excise Duty?

Alcoholic liquor.

Tobacco and tobacco products.

Petroleum products.

Lottery /Betting/ Gambling.

Correct Answer

Option 2

Correct Answer

Explanation

Q24:

2025: 27 May Shift 2

Macro

>

Government Budget

Medium

To obtain an estimate of borrowing on account of current expenditures exceeding revenues, we need to calculate what has been called the primary deficit. Gross primary deficit...

Total expenditure - Total Revenue.

Gross fiscal deficit - Net interest liabilities.

Net borrowing at home + Borrowing from RBI + Borrowing from abroad.

Total expenditure - (Revenue receipts + Non-debt creating capital receipts).

Correct Answer

Option 2

Correct Answer

Explanation

Q25:

2025: 27 May Shift 2

Macro

>

Government Budget

Easy

The government imposes taxes that do not depend on income is called.

Lump-sum taxes.

Direct taxes.

Non-income taxes.

Indirect taxes.

Correct Answer

Option 1

Correct Answer

Explanation

Q26:

2025: 27 May Shift 2

Macro

>

Government Budget

Easy

Consumers will not voluntarily pay for what they can get for free and for which there is no exclusive title to the property being enjoyed. These non-paying users are known as....?

Private goods.

Public goods.

Free-goods.

Free-riders.

Correct Answer

Option 4

Correct Answer

Explanation

Q27:

2025: 26 May Shift 2

Macro

>

Government Budget

Medium

Which of the following represents the borrowing requirements of the government for the purposes other than interest payments?

Revenue deficit.

Fiscal deficit.

Primary Deficit.

Budgetary deficit.

Correct Answer

Option 3

Correct Answer

Explanation

Q28:

2025: 26 May Shift 2

Macro

>

Government Budget

Medium

Match list I with List II in the context of the Government Budget:

List-I	List-II
(A) Purchase of stocks of a private company by the general government	(I) Capital receipts
(B) Sale of equity of a public sector enterprise to private sector	(II) Revenue receipts
(C) Payment of interest by the government on loans from financial institutions	(III) Capital expenditure
(D) Stamp duty received by the government on property transactions in the country	(IV) Revenue expenditure

Choose the correct answer from the options given below:

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (III), (B) - (I), (C) - (IV), (D) - (II)

(A) - (IV), (B) - (I), (C) - (II), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q29:

2025: 26 May Shift 2

Macro

>

Government Budget

Medium

Which of the following statements is true about public goods?

(A) Public goods are non rival in nature.

(B) Public goods are non-excludable in nature.

(C) Public goods may be produced by the government or the private sector.

(D) Public goods and public production can be used interchangeably.

Choose the correct answer from the options given below:

(A), (B) and (C) only

(A), (B) and (D) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q30:

2025: 26 May Shift 2

Macro

>

Government Budget

Easy

The progressive taxation system seeks to achieve which of the following objectives of the government budget?

Reallocation of resources.

Economic Stability.

Balanced regional development.

Redistribution of income.

Correct Answer

Option 4

Correct Answer

Explanation

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