Q1. Which of the following are included in Current Account of Balance of Payments?
- Exports & imports of goods
- Exports & imports of services
- Income transfers (remittances, dividends)
- Capital inflows from FDI
(a) 1, 2 and 3 only
(b) 1 and 4 only
(c) 2, 3 and 4 only
(d) 1, 2, 3 and 4
Correct Answer: (a) 1, 2 and 3 only
Explanation:
- Current account → trade in goods, services, income, current transfers.
- FDI = Capital account.
Q2. Consider the following:
- Public debt includes loans from domestic and foreign sources.
- Revenue receipts include tax and non-tax revenues.
- Capital receipts include borrowings, disinvestment, and recoveries of loans.
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1 and 3 only
Correct Answer: (c) 1, 2 and 3
Explanation: All statements describe standard definitions in public finance.
Q3. Which of the following statements are correct about Goods and Services Tax (GST) in India?
- GST replaced multiple indirect taxes levied by Centre and States.
- GST is a destination-based tax.
- GST is levied only by the central government.
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Correct Answer: (a) 1 and 2 only
Explanation:
- GST = dual tax system: Centre (CGST) + State (SGST).
- Destination-based tax: collected where goods/services are consumed.
Q4. Which of the following are considered as sources of fiscal deficit financing?
- Borrowing from RBI
- Small savings
- Market loans
- Disinvestment proceeds
(a) 1, 2 and 3 only
(b) 1 and 3 only
(c) 1, 2, 3 and 4
(d) 2, 3 and 4 only
Correct Answer: (c) 1, 2, 3 and 4
Explanation: All listed sources are used for financing government’s fiscal deficit.
Q5. Consider the following statements about Public-Private Partnership (PPP) in infrastructure:
- PPP is used to leverage private sector efficiency for public projects.
- Viability Gap Funding (VGF) is provided by the government to make projects financially viable.
- PPP projects do not require any risk-sharing between the public and private sectors.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Correct Answer: (a) 1 and 2 only
Explanation:
- PPP = sharing of investment, management, and risk between government and private players.
- VGF → government grant to bridge financial gap.
- Statement 3 wrong → risk-sharing is essential feature of PPP.
