Budget – Multiple Choice Questions (MCQs)

1. 49. What is the impact of a budget surplus?

   • A. Increased government savings
   • B. Potential for tax cuts or increased spending
   • C. Reduced public debt
   • D. All of the above

2. 50. What is 'Crowding Out'?

   • A. Increased government borrowing leading to higher interest rates and reduced private investment
   • B. Increased private investment reducing the need for government borrowing
   • C. Government policies that support private sector growth
   • D. Reduced government spending freeing up resources for the private sector

3. 51. What is 'Revenue Deficit Grants'?

   • A. Grants given by the central government to states to cover their revenue deficits
   • B. Grants given for capital projects
   • C. Loans given to states for revenue expenditure
   • D. Revenue collected by states and shared with the center

4. 52. What is the significance of the budget for citizens?

   • A. It outlines government priorities and resource allocation
   • B. It directly impacts tax liabilities and public services
   • C. It provides a roadmap for the economy
   • D. All of the above

5. 53. What is the role of the Parliament in the budget process in India?

   • A. Approval of the budget
   • B. Amendments to the budget proposals
   • C. Discussion and scrutiny of the budget
   • D. All of the above

6. 54. What is a 'Supplementary Budget'?

   • A. An additional budget presented during the financial year to seek approval for additional expenditure
   • B. The budget presented after the general budget
   • C. A budget focused only on revenue items
   • D. A budget presented before the main budget

7. 55. What is an 'Interim Budget'?

   • A. A full budget presented before elections
   • B. A budget for a short period to cover expenses until a new government presents a full budget
   • C. A budget focused only on capital expenditure
   • D. A budget with no new policy announcements

8. 56. What is a 'Performance Budget'?

   • A. A budget that focuses on the outcomes and achievements of government programs and schemes
   • B. A budget based on past performance
   • C. A budget with detailed financial allocations
   • D. A budget prepared by external consultants