15 extra multiple-choice questions for Fiscal Economics (12th Standard Economics, Samacheer Kalvi), beyond the ones printed in the textbook — each with the correct option highlighted and a clear, worked explanation. Free to read in English and Tamil.
Q1
The term 'fiscal' is derived from a Greek word which historically represents which of the following?
- A. A leather bag
- B. A basketCorrect
- C. A balance scale
- D. A treasury chest
Explanation. The word fiscal is derived from a Greek word meaning basket, which symbolizes the public purse in financial administration.
Q2
Which economist defined Public Finance as a subject lying on the borderline between Economics and Politics, concerned with the income and expenditure of public authorities?
- A. Adam Smith
- B. Hugh DaltonCorrect
- C. Philip E. Taylor
- D. Arthur Smithies
Explanation. Hugh Dalton defined public finance as concerned with the income and expenditure of public authorities and the adjustment of one to the other, noting its position between economics and politics.
Q3
In India, which administrative body is responsible for recommending the plans and policies of Direct Taxes to the government?
- A. Central Board of Indirect Taxes and Customs
- B. Central Board of Direct TaxesCorrect
- C. Finance Commission of India
- D. Administrative Reforms Commission
Explanation. The Central Board of Direct Taxes, which functions under the Ministry of Finance, recommends the plans and policies for direct taxes in India.
Q4
The method of redeeming public debt by establishing a separate 'Sinking Fund' was first introduced in England by which of the following individuals?
- A. WalpolCorrect
- B. Hugh Dalton
- C. Adam Smith
- D. Philip E. Taylor
Explanation. The sinking fund method, where a fixed amount is credited annually to pay off the principal debt upon maturity, was first introduced in England by Walpol.
Q5
Under which Article of the Indian Constitution is the Union Government required to submit its Annual Financial Statement, popularly known as the Union Budget, to the Parliament?
- A. Article 112Correct
- B. Article 202
- C. Article 116
- D. Article 280
Explanation. Article 112 of the Indian Constitution mandates that the Union Government present its annual financial statement to the Parliament.
Q6
Which Article of the Indian Constitution governs the presentation of the Annual Financial Statement of a State Government in its Legislative Assembly?
- A. Article 112
- B. Article 116
- C. Article 202Correct
- D. Article 268
Explanation. According to the Indian Constitution, each State Government must submit its annual budget statement under Article 202 to its Legislative Assembly.
Q7
Under which Article of the Indian Constitution is the special provision for a 'Vote-on-Account' budget presented?
- A. Article 112
- B. Article 116Correct
- C. Article 202
- D. Article 280
Explanation. Article 116 of the Constitution allows the government to obtain a vote-on-account, which grants legal permission to incur necessary expenditures before the full budget is approved.
Q8
In which financial year did the Government of India present Zero-Base-Budgeting (ZBB) for the first time?
- A. 1951-52
- B. 1987-88Correct
- C. 1991-92
- D. 2017-18
Explanation. The Government of India introduced Zero-Base-Budgeting in the 1987-88 budget, which requires a fresh evaluation and justification for every expenditure item.
Q9
The concept of 'Performance Budget', recommended by the Administrative Reforms Commission under Sir Hooper in 1949, was first implemented in which country?
- A. United Kingdom
- B. India
- C. France
- D. United States of AmericaCorrect
Explanation. The Performance Budget, which bases allocations on outcomes and achievements, was first recommended and created in the United States of America.
Q10
Which of the following budget deficits represents the fiscal deficit of the government minus interest payments on past borrowings?
- A. Revenue Deficit
- B. Budget Deficit
- C. Primary DeficitCorrect
- D. Monetized Deficit
Explanation. Primary deficit is calculated by subtracting interest payments from the fiscal deficit, reflecting the current borrowing requirements of the government.
Q11
How many subjects of joint interest to both the Union and the States are currently included in the Concurrent List under the Seventh Schedule of the Indian Constitution?
- A. 100 subjects
- B. 61 subjects
- C. 52 subjectsCorrect
- D. 20 subjects
Explanation. The Seventh Schedule of the Constitution divides powers across three lists, placing 52 subjects of mutual importance under the Concurrent List.
Q12
Which principle of federal finance states that the cost of collecting taxes should be kept at a minimum to maximize available public revenue?
- A. Principle of Efficiency
- B. Principle of Administrative EconomyCorrect
- C. Principle of Fiscal Access
- D. Principle of Adequacy
Explanation. The Principle of Administrative Economy dictates that tax collection costs should be minimized, leaving the bulk of revenue available for other public services.
Q13
In which year was the first Finance Commission of India established to define the financial relations framework between the Centre and the States?
- A. 1947
- B. 1950
- C. 1951Correct
- D. 1956
Explanation. Established under Article 280, the very first Finance Commission of India was set up in the year 1951 with K. C. Neogy as Chairman.
Q14
Who was appointed as the Chairman of the 15th Finance Commission of India, whose recommendations apply for the 2020–25 period?
- A. Dr. Y. V. Reddy
- B. Dr. Vijay L. Kelkar
- C. N. K. SinghCorrect
- D. C. Rangarajan
Explanation. N. K. Singh was appointed as the Chairman of the 15th Finance Commission, which was constituted in November 2017 for the operational duration of 2020-25.
Q15
Which scholar defined fiscal policy as a system where the government uses its expenditure and revenue programmes to produce desirable effects and avoid undesirable effects on national income, production, and employment?
- A. Arthur SmithiesCorrect
- B. Buehler
- C. Hugh Dalton
- D. Philip E. Taylor
Explanation. Arthur Smithies defined fiscal policy in terms of the government using its revenue and spending programs to guide national income, production, and employment toward desirable outcomes.
