Government Budget Class 12 MCQ Questions ISC covers certain important topics, which are covered under syllabus for ISCE Class 12 and are coming in Term II examination for the academic year 2022-23. Government Budget Class 12 MCQ Questions Test contains 59 questions. MCQ on Economics Class 12 ISC have been made for Class 12 students to help check the concept you have learnt from detailed classroom sessions and application of your knowledge.
Government Budget Class 12 MCQ Questions
Meaning of government budget
1._______ is an annual financial statement of the estimated receipts and expenditure of the government in a fiscal year.
(a) BOP
(b) Financial budget
(c) Government budget
(d) Government statement
Answer
Answer: (c) Government budget
2. Fiscal year ranges from ___ to______.
(a) 1 April – 31 March
(b) 1 March-31 April
(c) 1 January-31 December
(d) 1 December-31 November
Answer
Answer: (a) 1 April – 31 March
3. Government budget facilitates
(a) Estimates for the coming financial year
(b) Actual financial accounts for the previous year
(c) Revised estimates of the current year
(d) All of the above
Answer
Answer: (d) All of the above
4. Government budget is_____ in India.
(a) Compulsory
(b) Constitutional obligation
(c) IMF obligation
(d) World Bank obligation
Answer
Answer: (b) Constitutional obligation
5. Under article_____, the government budget should be made and presented Before the parliament.
(a) 113
(b) 112
(c) 111
(d) 110 A
Answer
Answer: (b) 112
6. The financial statement of India is titled as:
(a) Budget of government
(b) Budget for fiscal year
(c) Budget of the central government
(d) Budget of the people
Answer
Answer: (c) Budget of the central government
7. In India, the budget is presented first in;
(a) Rajya Sabha
(b) Assembly
(c) Lok Sabha
(d) All of the above
Answer
Answer: (c) Lok Sabha
8. The budget is presented on 1 February. (True/False)
Answer
Answer: True
Government Budget Class 12 MCQ Questions
Types of government budget in India
9. Which of the following are the types of government budgets in India?
(a) Union budget
(b) State budget
(c) Supplementary budget
(d) All of the above
Answer
Answer: (d) All of the above
10. ______ is the budget prepared by the Central Government for the country as a whole.
(a) Union budget
(b) State budget
(c) Supplementary budget
(d) All of the above
Answer
Answer: (a) Union budget
11. Till 2016, the union budget was presented in ____ parts.
(a) 2
(b) 3
(c) 5
(d) 4
Answer
Answer: (a) 2
12. The parts of union budgets were;
(a) Railway budget
(b) General budget
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
13. The Railways budget showed the details of estimated receipts and estimated expenditure of the Railway ministry on Railways only. (True/False)
Answer
Answer: True
14. The general budget shows the estimated receipts and expenditures of the entire economy. (True/False)
Answer
Answer: True
15. In ___ year the budget of _____, the Railway budget is merged into the general budget.
(a) 2016-17
(b) 2018-19
(c) 2017-18
(d) 2020-2021
Answer
Answer: (b) 2018-19
16. _____ is the budget prepared by the state government of a country.
(a) State budget
(b) Central bank
(c) Union budget
(d) None of the above
Answer
Answer: (a) State budget
17. _____ Provides a link between financial allocations and physical achievements.
(a) State budget
(b) Central bank
(c) Union budget
(d) Performance budget
Answer
Answer: (d) Performance budget
18. Performance budget serves as an instrument of administration and financial control. (True/False)
Answer
Answer: True
Government Budget Class 12 MCQ Questions
Components of the government budget
19. Which of the following are the parts of the budget?
(a) Revenue budget
(b) Capital budget
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
20. ______ shows revenue receipts and revenue expenditure of the government. .
(a) Revenue budget
(b) Capital budget
(c) Long term budget
(d) Short term budget
Answer
Answer: (a) Revenue budget
21. Revenue budget consists of;
(a) Revenue receipts
(b) Revenue expenditure
(c) Revenue debt
(d) Both (a)&(b)
Answer
Answer: (d) Both (a)&(b)
22. Which of the following statements about revenue receipts are true?
(a) They are non-redeemable
(b) They create no liabilities
(c) They don’t reduce any assets
(d) All of the above
Answer
Answer: (d) All of the above
23. Which of the following are revenue receipts?
(a) Income tax
(b) House tax
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
24. ______ is the expenditure incurred on the normal functioning of the government and interest payment on government debts.
(a) Revenue budget
(b) Revenue expenditure
(c) Revenue receipts
(d) All of the above
Answer
Answer: (b) Revenue expenditure
25. Revenue expenditure neither Creates any assets nor reduces liability. (True/False)
Answer
Answer: True
26. ______ comprises capital receipts and capital expenditure.
(a) Revenue budget
(b) Revenue expenditure
(c) Revenue receipts
(d) Capital budget
Answer
Answer: (d) Capital budget
27. ______ receipts Create liabilities or reduce assets of the government.
(a) Capital budget
(b) Capital receipts
(c) Capital expenditure
(d) Revenue budget
Answer
Answer: (b) Capital receipts
28. Which of the following are the components of capital receipts?
(a) Borrowing
(b) Repayment of loans
(c) Disinvestment
(d) All of the above
Answer
Answer: (d) All of the above
29. _______ is the expenditure of the government which leads to the creation of physical and financial assets and reduction in liabilities.
(a) Capital budget
(b) Capital receipts
(c) Capital expenditure
(d) Revenue budget
Answer
Answer: (c) Capital expenditure
30. Which of the following are physical assets?
(a) Building
(b) Raw material
(c) Labour
(d) Bricks
Answer
Answer: (a) Building
Government Budget Class 12 MCQ Questions
Classification of budget receipts
31. Which of the following is the most important source of revenue for the government?
(a) Tax
(b) Subsidy
(c) Investment
(d) Disinvestment
Answer
Answer: (a) Tax
32. Personal income tax is levied on the income of individuals. (True/False)
Answer
Answer: True
33. ______ is the tax on income of domestic and foreign companies.
(a) Custom duty
(b) Corporate tax
(c) Income tax
(d) House tax
Answer
Answer: (b) Corporate tax
34. ______ is the tax imposed on commodities imported into the country.
(a) Custom duty
(b) Corporate tax
(c) Income tax
(d) House tax
Answer
Answer: (a) Custom duty
35. ________ is levied by the government on the Commodities produced within a country.
(a) Custom duty
(b) Corporate tax
(c) Union excise duty
(d) Union tax
Answer
Answer: (c) Union excise duty
36. Service tax is levied on the export of services from foreign countries. (True/False)
Answer
Answer: False
37. Which of the following are the main sources of non-tax revenue?
(a) Interest receipts
(b) Dividend and profits
(c) Revenue from services provided by the government
(d) All of the above
Answer
Answer: (d) All of the above
38. Capital receipts are classified into;
(a) Recovery of loans and advances
(b) Small savings
(c) External assistance
(d) All of the above
Answer
Answer: (d) All of the above
39. ______ are the loans raised by the government from the public.
(a) Market loans
(b) Government loans
(c) Public loan
(d) All of the above
Answer
Answer: (a) Market loans
40. Which of the following are the examples of special deposits.
(a) Provident fund
(b) LIC
(c) Gratuity fund
(d) All of the above
Answer
Answer: (d) All of the above
41. Small savings consists of;
(a) National saving certificates
(b) Post office savings account
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
42. _____ means Selling shares of the public sector units.
(a) Disinvestment
(b) Special saving
(c) Special deposit
(d) All of the above
Answer
Answer: (a) Disinvestment
Government Budget Class 12 MCQ Questions
Classification of Government Expenditure
43. Revenue expenditure is recurring in nature.. (True/False)
Answer
Answer: True
44. Public expenditure is classified into
(a) Revenue and capital expenditure
(b) Developmental and non-developmental expenditure
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
45. All the Expenditures which do not create any physical or financial assets and do not reduce liability are called;
(a) Capital receipts
(b) Revenue expenditure
(c) Capital expenditure
(d) None of the above
Answer
Answer: (b) Revenue expenditure
46. Which of the following are the examples of revenue expenditure?
(a) Salaries
(b) Pensions
(c) Subsidies
(d) All of the above
Answer
Answer: (d) All of the above
47. Capital expenditure is non-recurring. (True/False)
Answer
Answer: True
48. Expenditures incurred on activities that are directly related to the economic and social development of the country are called;
(a) Developmental expenditures.
(b) non-developmental expenditure
(c) Capital expenditure
(d) Revenue expenditure
Answer
Answer: (a) Developmental expenditures.
49. Which of the following are the examples of developmental expenditure?
(a) Agriculture
(b) Industry
(c) Education
(d) All of the above
Answer
Answer: (d) All of the above
50. __________ are those expenditures that are incurred in providing essential general services by the government.
(a) Developmental expenditures.
(b) non-developmental expenditure
(c) Capital expenditure
(d) Revenue expenditure
Answer
Answer: (b) non-developmental expenditure
51. Which of the following is an example of non-developmental Expenditure?
(a) Expenditure incurred on defence and administrative services
(b) Interest payments
(c) pensions and other types of retirement benefits
(d) All of the above
Answer
Answer: (d) All of the above
Government Budget Class 12 MCQ Questions
Balanced budget v/s surplus or deficit budget
52. In terms of the magnitude of receipts and expenditure, the budget may be classified as;
(a) Balanced budget
(b) Surplus budget
(c) Deficit budget
(d) All of the above
Answer
Answer: (d) All of the above
53. When government receipts are equal to government expenditure, this is known as;
(a) Balanced budget
(b) Surplus budget
(c) Deficit budget
(d) None of the above
Answer
Answer: (a) Balanced budget
54. When government Expenditure exceeds government receipts, it is known as a surplus budget. (True/False)
Answer
Answer: False
55. ______ is the budget when government receipts exceed government expenditure.
(a) Balanced budget
(b) Surplus budget
(c) Deficit budget
(d) None of the above
Answer
Answer: (b) Surplus budget
56. Which of the following statements about the surplus budget are correct?
(a) It implies leakages from the flow of income
(b) It leads to a contraction in the level of economic activity
(c) A surplus budget reduces aggregate demand in the economy
(d) All of the above
Answer
Answer: (d) All of the above
57. Which of the following statements about the deficit budget are correct?
(a) It indicates injections into the circular flow of Income
(b) This leads to expansion in the level of economic activity
(c) Deficit budget used to solve recession in the economy
(d) All of the above
Answer
Answer: (d) All of the above
58. Balanced budget leads to neither expansion nor contraction in the level of economic activity. (True/False)
Answer
Answer: True
59. A change in the size of the balanced budget will lead to a change in national income equal to the change in a balanced budget, this is known as;
(a) Balanced budget Multiplier
(b) Unit multiplier
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
Economics Class 12 ISC MCQs – Term 2
- Theory of Income and Employment Class 12 MCQ
- Money : Meaning and Functions
- Banks : Commercial Bank and Central bank
- Balance of Payments and Exchange Rate
- Government Budget
- MCQ on Fiscal Policy Class 12 Economics
- National Income and Circular flow of Income
- National Income Aggregates Class 12 MCQ
- Methods of Measuring National Income Class 12 MCQ