Economy & Business MCQs

1.

The achievement of a lower fiscal deficit underscores the government's commitment to:

A Fiscal imprudence and unsustainable growth

B Fiscal prudence and sustainable economic growth

C Increased government debt and short-term stimulus

D Reduced investment in essential services

2.

What is the primary implication of 'tax buoyancy'?

A Tax revenues are not increasing with economic growth

B Tax revenues are increasing proportionally or more than proportionally with economic growth

C Tax rates are being reduced

D Tax collection efficiency is declining

3.

The government's focus on 'rationalizing subsidies' means:

A Increasing the amount of subsidies provided

B Making subsidies more efficient and targeted

C Eliminating all subsidies

D Increasing subsidies for non-essential goods

4.

What does 'fiscal consolidation' refer to?

A Increasing government spending without regard to revenue

B Reducing the government's budget deficit and debt

C Increasing taxes to fund new government programs

D Borrowing more money to stimulate the economy

5.

The RBI has acknowledged the fiscal improvements, which contribute to:

A A more volatile financial environment

B A more stable financial environment

C Increased uncertainty in the markets

D Reduced investor confidence

6.

A lower fiscal deficit enhances India's:

A Macroeconomic instability and creditworthiness

B Macroeconomic stability and creditworthiness

C Dependence on foreign aid

D Vulnerability to external shocks

7.

What is a potential consequence of a lower fiscal deficit on interest rates?

A Increased pressure on interest rates

B Easing pressure on interest rates

C No impact on interest rates

D Guaranteed increase in interest rates

8.

Which factors contributed to the narrowing fiscal deficit?

A Declining revenue growth and increased expenditure

B Robust revenue growth and prudent expenditure management

C Increased subsidies and reduced tax buoyancy

D Higher government borrowing and reduced economic activity

9.

What does a narrowing fiscal deficit indicate?

A Increased government borrowing requirements

B Improved fiscal discipline and effective management of government finances

C A decline in economic activity

D Rising inflation rates

10.

What was India's fiscal deficit as a percentage of GDP in FY 2025-26?

A 4.5%

B 5.1%

C 5.8%

D 6.0%

Economy & Business MCQs - 2026-03-30