Economy

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11 questions

2026 · Question 94 · Public Finance
Which one of the following best describes the ‘Crowding Out Effect’ in the context of fiscal policy ?
Choose your answer(a)A situation where private investment increases due to increased Government spending(b)A situation where Government borrowing leads to higher interest rates, which reduces private investment(c)A situation where an increase in taxes leads to increased private sector investment(d)A situation where Government spending has no impact on aggregate demand
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2025 · Question 10 · Public Finance
Consider the following statements : I. Capital receipts create a liability or cause a reduction in the assets of the Government. II. Borrowings and disinvestment are capital receipts. III. Interest received on loans creates a liability of the Government. Which of the statements given above are correct?
Choose your answer(a)I and II only(b)II and III only(c)I and III only(d)I, II and III
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2025 · Question 61 · Public Finance
Suppose the revenue expenditure is ₹ 80,000 crores and the revenue receipts of the Government are ₹ 60,000 crores. The Government budget also shows borrowings of ₹ 10,000 crores and interest payments of ₹ 6,000 crores. Which of the following statements are correct? I. Revenue deficit is ₹ 20,000 crores. II. Fiscal deficit is ₹ 10,000 crores. III. Primary deficit is ₹ 4,000 crores. Select the correct answer using the code given below.
Choose your answer(a)I and II only(b)II and III only(c)I and III only(d)I, II and III
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2025 · Question 65 · Public Finance
A country’s fiscal deficit stands at ₹ 50,000 crores. It is receiving ₹ 10,000 crores through non-debt creating capital receipts. The country’s interest liabilities are ₹ 1,500 crores. What is the gross primary deficit?
Choose your answer(a)₹ 48,500 crores(b)₹ 51,500 crores(c)₹ 58,500 crores(d)None of the above
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2025 · Question 66 · Public Finance
Which of the following statements with regard to recommendations of the 15th Finance Commission of India are correct? I. It has recommended grants of ₹ 4,800 crores from the year 2022–23 to the year 2025–26 for incentivizing States to enhance educational outcomes. II. 45% of the net proceeds of Union taxes are to be shared with States. III. ₹ 45,000 crores are to be kept as performance-based incentive for all States for carrying out agricultural reforms. IV. It reintroduced tax effort criteria to reward fiscal performance. Select the correct answer using the code given below.
Choose your answer(a)I, II and III(b)I, II and IV(c)I, III and IV(d)II, III and IV
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2024 · Question 51 · Public Finance
Consider the following statements : Statement-I : If the United States of America (USA) were to default on its debt, holders of US Treasury Bonds will not be able to exercise their claims to receive payment. Statement-II : The USA Government debt is not backed by any hard assets, but only by the faith of the Government. Which one of the following is correct in respect of the above statements ?
Choose your answer(a)Both Statement-I and Statement-II are correct and Statement-II explains Statement-I(b)Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I(c)Statement-I is correct, but Statement-II is incorrect(d)Statement-I is incorrect, but Statement-II is correct
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2023 · Question 29 · Public Finance
Consider the following : 1. Demographic performance 2. Forest and ecology 3. Governance reforms 4. Stable government 5. Tax and fiscal efforts For the horizontal tax devolution, the Fifteenth Finance Commission used how many of the above as criteria other than population area and income distance?
Choose your answer(a)Only two(b)Only three(c)Only four(d)All five
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2022 · Question 10 · Public Finance
With reference to the Indian economy, consider the following statements : 1. A share of the household financial savings goes towards government borrowings. 2. Dated securities issued at market-related rates in auctions form a large component of internal debt. Which of the above statements is/are correct ?
Choose your answer(a)1 only(b)2 only(c)Both 1 and 2(d)Neither 1 nor 2
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2021 · Question 3 · Public Finance
Which among the following steps is most likely to be taken at the time of an economic recession?
Choose your answer(a)Cut in tax rates accompanied by increase in interest rate(b)Increase in expenditure on public projects(c)Increase in tax rates accompanied by reduction of interest rate(d)Reduction of expenditure on public projects
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2021 · Question 9 · Public Finance
Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?
Choose your answer(a)Diversion of resources to the purchase of real estate and investment in luxury housing(b)Investment in unproductive activities and purchase of precious stones, jewellery, gold, etc.(c)Large donations to political parties and growth of regionalism(d)Loss of revenue to the State Exchequer due to tax evasion
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)
2020 · Question 6 · Public Finance
Along with the Budget, the Finance Minister also places other documents before the Parliament which include ‘The Macro Economic Framework Statement’. The aforesaid document is presented because this is mandated by
Choose your answer(a)Long standing parliamentary convention(b)Article 112 and Article 110(1) of the Constitution of India(c)Article 113 of the Constitution of India(d)Provisions of the Fiscal Responsibility and Budget Management Act, 2003
Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)

Which one of the following best describes the ‘Crowding Out Effect’ in the context of fiscal policy ?

A country’s fiscal deficit stands at ₹ 50,000 crores. It is receiving ₹ 10,000 crores through non-debt creating capital receipts. The country’s interest liabilities are ₹ 1,500 crores. What is the gross primary deficit?

Consider the following : 1. Demographic performance 2. Forest and ecology 3. Governance reforms 4. Stable government 5. Tax and fiscal efforts For the horizontal tax devolution, the Fifteenth Finance Commission used how many of the above as criteria other than population area and income distance?

Which among the following steps is most likely to be taken at the time of an economic recession?

Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?

Along with the Budget, the Finance Minister also places other documents before the Parliament which include ‘The Macro Economic Framework Statement’. The aforesaid document is presented because this is mandated by