Economics Topics
Undergraduate level — Economics
Choose question count and time — session stays in your browser only.
filter_alt Topics
Microeconomics
Macroeconomics
Indian Economy
Bihar Economy
Budget & Fiscal Policy
quiz Questions
Q131
Which central constitutional amendment act established the GST Council, giving union and state finance ministers equal joint stakes in altering indirect tax rates?
42nd Constitutional Amendment
101st Constitutional Amendment Act
73rd Constitutional Amendment
122nd Reform Adjustment Bill
Explanation
The 101st Constitutional Amendment Act, 2016 inserted Article 279A, which authorized setting up the powerful federal GST Council.
Q132
What physical parameter acts as a significant long-term geographic constraint on the agricultural productivity of North Bihar, altering state crop loss budgets?
An absolute lack of organic nitrogen in soil systems
Recurrent severe flooding from rivers originating in Nepal upper catchments
The complete absence of ground-water irrigation reserves
The expansion of desertification zones across Saran
Explanation
North Bihar is highly prone to chronic flooding because multiple major rivers (such as the Kosi, Gandak, and Bagmati) originate in the upper catchments of Nepal and carry immense water and sediment loads down to the plains.
Q133
Which state body prepares the 'Bihar Economic Survey' presented before the state legislature just prior to the tabling of the annual state budget?
BPSC Advisory Research Wing
Finance Department, Government of Bihar
NITI Aayog state branch
Directorate of Economics and Statistics
Explanation
The Department of Finance, Government of Bihar, compiles the annual Economic Survey to review macro-developmental matrices and policy execution benchmarks.
Q134
Which type of public sector borrowing describes the situation where the government issues special debt instruments directly to the central bank to print new currency, generating a high risk of inflation?
Market debt optimization
Monetized Deficit
External commercial borrowing
Revenue balance correction
Explanation
Monetized deficit (or deficit financing via currency creation) happens when the central bank purchases government bonds directly, expanding the monetary base and risking demand-pull inflation loops.
Q135
What structural shift was recommended by the 14th and 15th Finance Commissions regarding the vertical share of central taxes distributed to the states' pool?
It collapsed the vertical share to less than 20%
It raised and anchored the vertical devolution base at 41% to 42%
It converted all central grants into soft loans
It pegged the tax sharing pool to state GDP growth rankings
Explanation
The 14th Finance Commission raised the states' vertical share from 32% to 42%. The 15th Finance Commission adjusted this slightly to 41% to account for the restructuring of the erstwhile state of Jammu and Kashmir into UTs.
Q136
Under the microeconomic classification of public expenditures, what term defines expenses that lead directly to the acquisition of long-term physical or financial assets, expanding future output potential?
Revenue expenditure
Capital expenditure
Transfer payment overhead
Consumption subsidy disbursement
Explanation
Capital expenditures are asset-creating budget investments (e.g., funding national highways, power lines, or school buildings) that boost long-run potential growth.
Q137
Which structural institution handles the legal registration, lease adjustments, and basic land mutations for setting up industrial zones inside Bihar?
COMPFED core cell
BIADA (Bihar Industrial Area Development Authority)
Bihar State Finance Corporation
Directorate of Land Revenue mapping
Explanation
BIADA (Bihar Industrial Area Development Authority) is the statutory agency tasked with acquiring and developing land plots for industrial expansion across the state.
Q138
What does a balanced budget multiplier value of exactly one ($K_b = 1$) imply in macro-fiscal stabilization theory?
An increase in spending matched by taxes has zero effect on output
An equal increase in government spending and taxes expands national income by the exact amount of the spending hike
The fiscal deficit expands exponentially
The private propensity to save drops below zero
Explanation
The Haavelmo theorem demonstrates that if government spending ($G$) and lump-sum taxes ($T$) are increased by the exact same amount, national income rises by that exact amount, meaning the balanced budget multiplier is equal to 1.
Q139
Which type of public asset represents non-rival but legally excludable economic resources, often monetized via user toll charges across state highway blocks?
Common pool resources
Club goods / Toll resources
Pure public assets
Rivalrous non-appropriable pool goods
Explanation
Club goods (or toll goods) are characterized by excludability (access can be gated via fees or passes) but low rivalry in consumption, differentiating them from pure public or private goods.
Q140
What is the primary microeconomic implication of a high 'Tax Elasticity' index relative to discretionary tax rate modifications?
Tax collections grow independently of rate changes
Tax yields respond highly to adjustments in discretionary rates, warning that sharp hikes could erode the taxable base
The fiscal deficit is eliminated instantly
The underlying multiplier parameter reaches infinity
Explanation
Tax elasticity measures the responsiveness of tax revenue explicitly matching changes in tax rates. A high elasticity index warns that rising rates could shrink the taxable base due to high structural substitutions.