MCQ on Fiscal Policy Class 12 Economics 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. MCQ on Fiscal Policy Class 12 Economics Test contains 55 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.
MCQ on Fiscal Policy Class 12 Economics
Public finance
1.______ is the study of the income and expenditure of public authorities.
(a) Public finance
(b) Overall finance
(c) Private finance
(d) Individual finance
Answer
Answer: (a) Public finance
2. Which of the following are considered public authorities?
(a) National government
(b) Municipal corporation
(c) District board
(d) All of the above
Answer
Answer: (d) All of the above
3. The government raises funds by taking loans from foreign governments. (True/False)
Answer
Answer: False
4. Public finance is the study of income and expenditure of the government at;
(a) Central level
(b) Local-level
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
5. “Public finance is the branch of knowledge which is concerned with the income and expenditure of public authorities.” This definition was given by;
(a) Dalton
(b) Mary
(c) Daily
(d) Kent
Answer
Answer: (a) Dalton
6. _____ is known as the policies that fiscal authorities adopt.
(a) Public policy
(b) Fiscal policy
(c) Government policies
(d) None of the above
Answer
Answer: (b) Fiscal policy
MCQ on Fiscal Policy Class 12 Economics
Meaning and instruments of fiscal policy
7. Fiscal policy is defined as the policy under which;
(a) The government uses instruments of taxation
(b) The government uses instruments of public borrowing and public spending
(c) Government has a predetermined purpose of economic policy
(d) All of the above
Answer
Answer: (d) All of the above
8. Which of the following are the tools of fiscal policy?
(a) Taxation
(b) Government Research
(c) Government borrowing
(d) None of the above
Answer
Answer: (a) Taxation
9. Which of the following objectives are achieved by the fiscal policy?
(a) Economic stability
(b) Achieving a high level of employment
(c) Accelerating economic growth
(d) All of the above
Answer
Answer: (d) All of the above
MCQ on Fiscal Policy Class 12 Economics
Public revenue
10. Income of the government from all sources is called public revenue. (True/False)
Answer
Answer: True
11. Which of the following are examples of public revenue?
(a) Taxes and receipts
(b) Interest receipts
(c) Dividend and profits
(d) All of the above
Answer
Answer: (d) All of the above
12. Public receipts include all the incomes of the government, including ________.
(a) Public borrowing
(b) Issue of new currency
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
13, Public revenue and public receipts are the same things. (True/False)
Answer
Answer: False
MCQ on Fiscal Policy Class 12 Economics
Instruments of fiscal policy
14. Which of the following are the instruments of fiscal policy?
(a) Tax
(b) Public expenditure
(c) Public debt
(d) All of the above
Answer
Answer: (d) All of the above
15. “A tax is a compulsory contribution from a person to the government to defray the expenses incurred in the common interest of all without reference to special benefits concerned.” This definition was given by;
(a) Kent
(b) Seligman
(c) Harman delay
(d) Dalton
Answer
Answer: (b) Seligman
16. Which of the following are the characteristics of tax?
(a) Personal obligation
(b) Compulsory contribution
(c) General benefits
(d) All of the above
Answer
Answer: (d) All of the above
17. Taxes are classified as;
(a) Direct tax
(b) Indirect tax
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
18. The ultimate burden is known as;
(a) Incidence
(b) Inclination
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (a) Incidence
19. _____ of a tax refers to the burden of a tax on the person who pays it to the government in the first instance;
(a) Incidence
(b) Impact
(c) Inclination
(d) None of the above
Answer
Answer: (b) Impact
20. ______ of a tax refers to the money burden of a tax on the person who ultimately pays it.
(a) Incidence
(b) Impact
(c) Inclination
(d) None of the above
Answer
Answer: (a) Incidence
21. _____ is a tax whose burden is borne by the same person on whom it is levied
(a) Indirect tax
(b) Impact tax
(c) Direct tax
(d) Incidence tax
Answer
Answer: (c) Direct tax
22. Which of the following are examples of direct tax?
(a) Wealth tax
(b) Corporation tax
(c) Property tax
(d) All of the above
Answer
Answer: (d) All of the above
23. The tax which is initially imposed and paid by one Individual, but the burden of which is passed Over to some other individual is called ______
(a) Corporation tax
(b) Property tax
(c) Indirect tax
(d) None of the above
Answer
Answer: (c) Indirect tax
24. GST is an indirect tax. (True/False)
Answer
Answer: True
25. _____ is levied on the income and property of a person.
(a) Indirect tax
(b) Direct tax
(c) GST
(d) All of the above
Answer
Answer: (b) Direct tax
MCQ on Fiscal Policy Class 12 Economics
26. Which of the following are the merits of direct tax?
(a) It is economical
(b) It is equitable
(c) It is simple
(d) All of the above
Answer
Answer: (d) All of the above
27. Which of the following are demerits of Direct tax?
(a) It is unpopular
(b) It is inconvenient
(d) It has a narrow base
(d) All of the above
Answer
Answer: (d) All of the above
28. Which of the following are not the merits of indirect tax?
(a) It is regressive and unjust
(b) It had a wide coverage
(c) It is convenient
(d) Both (a)&(b)
Answer
Answer: (a) It is regressive and unjust
29. Indirect taxes are uneconomical and uncertain. (True/False)
Answer
Answer: True
30. Indirect tax and Direct tax are mutually complementary to each other. (True/False)
Answer
Answer: True
31. GST came into effect on_____.
(a) 1 July 2017
(b) 8 November 2016
(c) 15 December 2017
(d) 4 January 2017
Answer
Answer: (a) 1 July 2017
32. _______ is the tax when the rate of taxation remains the same as the income of the taxpayer increases.
(a) Regressive tax
(b) Proportional tax
(c) Progressive tax
(d) None of the above
Answer
Answer: (b) Proportional tax
33. _____ is a tax when the rate of taxation increases as the taxpayer’s income increases.
(a) Regressive tax
(b) Proportional tax
(c) Progressive tax
(d) None of the above
Answer
Answer: (c) Progressive tax
34. ____ is a tax when taxation decreases as the taxpayer’s income increases.
(a) Regressive tax
(b) Progressive tax
(c) Proportional tax
(d) Degressive tax
Answer
Answer: (a) Regressive tax
35. When the rate of progression in taxation doesn’t increase in the same proportion as the increase in income, the tax is known as_______.
(a) Regressive tax
(b) Progressive tax
(c) Proportional tax
(d) Degressive tax
Answer
Answer: (d) Degressive tax
36. ______ taxes are generally not approved due to equity.
(a) Regressive tax
(b) Degressive tax
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
37. Progressive tax is popularly and universally accepted. (True/False)
Answer
Answer: True
38. Which of the following are the advantages of progressive tax?
(a) Ensures equitable and just distribution
(b) Helps in reducing inequalities
(c) It is productive
(d) All of the above
Answer
Answer: (d) All of the above
MCQ on Fiscal Policy Class 12 Economics
Public expenditure
39. _____ refers to the expenditure incurred by public authorities for its maintenance.
(a) Public expenditure
(b) Public debt
(c) Public finance
(d) None of the above
Answer
Answer: (a) Public expenditure
40. Public expenditure is incurred for;
(a) Meeting government expenditure
(b) To meet the collective needs of the citizens
(c) To promote economic and social welfare
(d) All of the above
Answer
Answer: (d) All of the above
41. Expenditure incurred on public health facilities is not considered as public expenditure. (True/False)
Answer
Answer: False
42. Which of the following sectors are affected by public expenditure?
(a) Production
(b) Investment
(c) Income distribution
(d) All of the above
Answer
Answer: (d) All of the above
43. In which of the following ways, public expenditure affects economic growth?
(a) Promotes economic development directly by promoting economic infrastructure
(b) Promotes economic development indirectly by promoting social infrastructure.
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
MCQ on Fiscal Policy Class 12 Economics
Public debt
44. ______ is the debt which the government owes to its subjects or the nationals of other countries.
(a) Public finance
(b) Public debt
(c) Public expenditure
(d() None of the above
Answer
Answer: (b) Public debt
45. Which of the following are the methods of debt redemption.
(a) Refunding
(b) Debt conversion
(c) Sinking fund
(d) All of the above
Answer
Answer: (d) All of the above
46. Refunding of debt means refusal to pay a debt by the government. (True/False)
Answer
Answer: False
47. _____ is the process by which the government raises new bonds to pay off the maturing bond.
(a) Refunding
(b) Repudiating
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (a) Refunding
48. _____means exchange of new debt for the old one.
(a) Refunding
(b) Repudiating
(c) Conversion
(d) None of the above
Answer
Answer: (c) Conversion
49. The annual payments are called___
(a) Amenities
(b) Annuities
(c) Fiscal payment
(d) All of the above
Answer
Answer: (b) Annuities
50. The government establishes a separate fund called;
(a) Annuities
(b) Repudiating
(c) Sinking fund
(d) All of the above
Answer
Answer: (c) Sinking fund
MCQ on Fiscal Policy Class 12 Economics
Deficit financing
51. ____ means meeting the deficit between government expenditure and revenue through the creation of new money.
(a) Annuities
(b) Repudiating
(c) Sinking fund
(d) Deficit financing
Answer
Answer: (d) Deficit financing
52. In foreign countries, the excess of government expenditure over its current revenue is called;
(a) Annuities
(b) Repudiating
(c) Sinking fund
(d) Deficit financing
Answer
Answer: (d) Deficit financing
53. In India, deficit financing is the excess of government expenditure over revenue, comprising;
(a) Current revenue
(b) Public borrowings
(c) Both (a)&(b)
(d) None of the above
Answer
Answer: (c) Both (a)&(b)
54. When the Government borrows from the Central bank, the latter gives a loan by printing more money, this is known as
(a) Demonetization of fiscal defict
(b) Sinking fund
(c) Refunding of fiscal deficit
(d) None of the above
Answer
Answer: (a) Demonetization of fiscal defict
55. Deficit financing in India treats public borrowing as the revenue of the government. (True/False)
Answer
Answer: True
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