Budget – Multiple Choice Questions (MCQs)

1. 1. What is a government budget?

   • A. A record of a government's past financial performance
   • B. An estimate of a government's revenue and expenditure for a specific period
   • C. A statement of a country's international trade
   • D. A plan for private sector investment

2. 2. What is the primary purpose of a government budget?

   • A. To track past financial transactions
   • B. To plan and manage government finances
   • C. To regulate the stock market
   • D. To control private sector activities

3. 3. What are the main components of a government budget?

   • A. Revenue and expenditure
   • B. Assets and liabilities
   • C. Income and expenses of individuals
   • D. Imports and exports

4. 4. What are the two main types of government revenue?

   • A. Tax revenue and non-tax revenue
   • B. Direct taxes and indirect taxes
   • C. Capital receipts and revenue receipts
   • D. Income tax and corporate tax

5. 5. What are direct taxes?

   • A. Taxes levied on goods and services
   • B. Taxes levied on income and wealth
   • C. Taxes paid by businesses
   • D. Taxes collected by local governments

6. 6. Which of the following is an example of a direct tax?

   • A. Goods and Services Tax (GST)
   • B. Excise Duty
   • C. Income Tax
   • D. Customs Duty

7. 7. What are indirect taxes?

   • A. Taxes levied on income and wealth
   • B. Taxes levied on goods and services
   • C. Taxes paid directly to the government by individuals
   • D. Taxes based on property ownership

8. 8. Which of the following is an example of an indirect tax?

   • A. Income Tax
   • B. Corporate Tax
   • C. Wealth Tax
   • D. Goods and Services Tax (GST)

9. 9. What are the two main types of government expenditure?

   • A. Revenue expenditure and capital expenditure
   • B. Planned expenditure and unplanned expenditure
   • C. Development expenditure and non-development expenditure
   • D. Recurring expenditure and non-recurring expenditure

10. 10. What is revenue expenditure?

    • A. Expenditure that results in the creation of physical or financial assets
    • B. Expenditure incurred for the normal functioning of the government and providing services
    • C. Investments in infrastructure projects
    • D. Loans given by the government

11. 11. Which of the following is an example of revenue expenditure?

    • A. Purchase of machinery
    • B. Construction of roads
    • C. Salaries of government employees
    • D. Investment in shares

12. 12. What is capital expenditure?

    • A. Expenditure incurred for the normal functioning of the government
    • B. Expenditure that results in the creation of physical or financial assets or reduction in liabilities
    • C. Day-to-day operational costs
    • D. Interest payments on loans