Fiscal Deficit

Q.

How can the government reduce inequalities of income through the budget?

Q. What is concentration gradient?

Q.

Are fiscal deficits necessarily inflationary?

Q.

Briefly explain the multiplier process.

Q.

Mention any 3 causes, which were responsible for economic reforms (1990-91 crisis).

Q.

Revenue deficit is estimated to be Rs. 20, 000 crore, and borrowing is estimated to be Rs. 15, 000 crore. If expenditure on interest payments is estimated to be 50% of the revenue deficit, find fiscal deficit and primary deficit.

Q.

Calculate Budgetary Deficit from following data:

Items (Rs In crore)

(i) Revenue expenditure 60, 000

(ii) Capital expenditure 30, 000

(iii) Revenue receipts 50, 000

(iv) Capital receipts 25, 000

1. 15, 000

2. 20, 000

3. 5, 000

4. 10, 000

Q.

Why was there a need for economic reforms?

Q.

Find Fiscal Deficit from the information given below:

Items (Rs in lakh)

(i) Borrowing by the government 600

(ii) Revenue receipts 100

(iii) Capital receipts 750

(iv) Interest payment 150

1. 100

2. 250

3. 600

4. 800

Q.

"Earth has got enough to satisfy the needs of all but not enough to satisfy the greed of one". Do you agree? What do you think: Should we expand the means or minimize greed?

Q.

Why and how was private sector regulated under the IPR 1956?

Q.

If borrowing and other liabilities are added to the budget deficits we get_______________ :

1. Fiscal Deficit

2. Primary Deficit

3. Capital Deficit

4. Revenue Deficit

Q.

A government budget shows a primary deficit of Rs. 4, 400 crore. The revenue expenditure on interest payment is Rs. 400 crores. How much is the fiscal deficit?

Q.

If US dollar becomes costlier in terms of the Indian rupee, it is good as well as bad for the domestic growth. How?

Q.

Total expenditure of a government budget is Rs 75, 000 crore and total receipts are Rs 45, 000 crore. How much is the budget deficit?

1. 45, 000

2. 1, 20, 000

3. 15, 000

4. 30, 000

Q.

Crowding out refers to:

1. intended investment squeezing unsold inventories

2. excess consumer spending competing with foreign demand for U.S. goods

3. the demand for exports making U.S. goods for expensive for consumers

4. reducing the availability of private capital

Q.

Find budget deficit from the following data:

Items (Rs in crore)

(i) Revenue receipts 40, 000

(ii) Revenue expenditure 30, 000

(iii) Capital receipts 30, 000

(iv) Capital expenditure 50, 000

Q.

Which of the following is not likely to be a government objective?

1. Increasing employment

2. Increasing economic growth

3. Increasing government spending

4. Increasing the level of exports

Q.

A government budget shows a primary deficit of Rs. 6, 900 crore. The revenue expenditure on interest payment is Rs. 400 crore. How much is the fiscal deficit?

Q.

Income and expenditure account records transaction of ____________.

Q.

Which of the following is/are implications of a fiscal deficit?

1. Inflationary spiral

2. National debts for future generation

3. All of these

4. Erosion of government credibility

Q. Potential due to dipole

Q. From the given information, determine: (a) Capital Expenditure and (b) Interest Payments

Particulers	(Rs. in Crore)
(i) Primary Deficit	8, 000
(ii) Fiscal Deficit	11, 000
(iii) Non-debt Creating Capital Receipts	9, 000
(iv) Revenue Deficit	5, 000

Q.

Which one of the following statements appropriately describes the “fiscal stimulus”?

1. It is a massive investment by the Government in the manufacturing sector to ensure that the supply of goods meets the demand surge caused by rapid economic growth.

2. It is Government’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation.

3. It is an extreme affirmative action by the Government to pursue its policy of financial inclusion.

4. It is an intense affirmative action of the Government to boost economic activity in the country.

Q. What is a fiscal deficit?

1. None of these
2. It is a gap between exports and imports minus external borrowings.
3. It is a gap between total expenditure and total receipts of the govt.
4. It is a gap between the values of exports and imports.

Q. In a government budget, revenue deficit is 50, 000 crores and borrowings are Rs. 75, 000 crores. The fiscal deficit will be ______________.

1. Rs. 25, 000 crores
2. Rs. 75, 000 crores
3. Rs. 1, 25, 000 crores
4. Rs. 50, 000 crores

Q. Which of the following is/are included in "Deficit Financing" in India? (The term is used frequently in economic planning)
A. Borrowing from the Reserve Bank of India
B. Issue of new currency notes
C. Withdrawal of past balances/surpluses etc

1. Only (B)
2. Only (C)
3. Only (A)
4. Only (A) and (B)

Q. Answer the following question

Explain the government’s development and non-development expenditure.

Q.

A budget surplus is:

1. The amount by which revenues exceed expenditures

2. The total amount owed by the federal government

3. The amount by which revenues fall short of projections

4. The amount by which expenditures exceed revenues

Q. Excess of foreign exchange receipts over foreign exchange payments on account of accommodating transactions equals deficit in the balance of payments.

1. True
2. False