Key Components and Structure of Budget Quiz

Question 1

From which main sources do revenue receipts in a government budget come?

Accepted Answer

Taxes and non-tax revenue

Answer

Only sales and customs duties

Answer

Taxes, non-tax revenue and borrowings

Answer

Only direct taxes

Question 2

What is the main purpose of capital expenditure in a budget?

Accepted Answer

Creation of physical assets and infrastructure

Answer

Payment of employee salaries

Answer

Meeting recurring expenses

Answer

Interest payments

Question 3

What does revenue deficit mean?

Accepted Answer

Revenue expenditure exceeds revenue receipts

Answer

Capital expenditure exceeds capital receipts

Answer

Total expenditure exceeds total receipts

Answer

Tax revenue did not increase

Question 4

Why is a balanced budget important?

Accepted Answer

It shows financial stability and reduced debt

Answer

It is only for developed countries

Answer

It is never possible

Answer

It prevents growth

Question 5

Which are examples of direct taxes?

Accepted Answer

Income tax and property tax

Answer

Excise duty and sales tax

Answer

Sales tax and customs duty

Answer

Only property tax

Question 6

Why is indirect tax important?

Accepted Answer

Collects broad-based revenue on all goods and services

Answer

Provides benefit to poor people

Answer

Affects only large businesses

Answer

Only way to reduce budget deficit

Question 7

What are the main sources of non-tax revenue?

Accepted Answer

Profits from public enterprises, service charges and miscellaneous sources

Answer

Only income tax

Answer

Only gifts and donations

Answer

Only customs duties

Question 8

Why is budget deficit a matter of concern?

Accepted Answer

It increases government borrowing and interest rates

Answer

It increases imports

Answer

It has no impact

Answer

It is always positive

Question 9

What is a characteristic of revenue expenditure?

Accepted Answer

These are recurring expenses that create no assets

Answer

It creates physical assets

Answer

It is for repaying loans

Answer

It is a one-time expense

Question 10

What measures can the government take to balance the budget?

Accepted Answer

Increase revenue or reduce expenditure

Answer

Only borrow more

Answer

Only reduce expenditure

Answer

Depend on foreign aid

Key Components and Structure of Budget

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