SELF-TEST 9

Chapter 8 : Public Finance of India

Time : 1 Hour] [Marks : 20

Q. 1. (A) Assertion and Reasoning questions : 3

(1) Assertion (A) : Government sells bonds to its citizens.
Reasoning (R) : Selling bonds is important type of internal debt.
Options :  (1) (A) is true, but  (R) is false.
(2) (A) is false, but (R) is true.
(3) Both (A) and (R) are true and (R) is the correct explanation
of (A).
(4) Both (A) and (R) are true and (R) is not the correct
explanation of (A).
(2) Assertion (A) : Debt raised by the government borrowings from World
Bank is an internal debt.
Reasoning (R) : G
 overnment of India borrowing (can borrow) funds
from the World Bank for provision of water supply.
Options :  (1) (A) is true, but  (R) is false.
(2) (A) is false, but (R) is true.
(3) Both (A) and (R) are true and (R) is the correct explanation
of (A).
(4) Both (A) and (R) are true and (R) is not the correct
explanation of (A).
(3) Assertion (A) : Government of India takes loans from Nationalized
Banks for developing infrastructural facilities.
Reasoning (R) : Loans taken by government for developing
infrastructural facilities from Nationalized Banks is an
internal debt.
Options :  (1) (A) is true, but  (R) is false.
(2) (A) is false, but (R) is true.
(3) Both (A) and (R) are true and (R) is the correct explanation
of (A).
(4) Both (A) and (R) are true and (R) is not the correct
explanation of (A).
(B) Give an economic term : 3
(1) Financial transaction made for the maximum benefit of the society.
(2) Compulsory contribution from the person to the government without
reference to special benefits conferred.
(3) Amount to be paid by the concerned person in case of violation of law.

Self-Test 9, Chapter 8 – Economics : Std XII 1

Q. 2. Distinguish between : (Any three) 6
(1) Public Finance and Private Finance
(2) Special Assessment and Special Levy
(3) Direct Tax and Indirect Tax
(4) Revenue Expenditure and Capital Expenditure

Q. 3.  Answer the following questions in brief : (Any one) 4

(1) Write in brief about Deficit Budget.
(2) Give definitions of Tax and explain the essential characteristics of tax.

Q. 4.  Study the following passage and answer the questions given below : 4

The conventional notion of social security is that the government would

make periodic payments to look after people in their old age, ill-health,
disability and poverty. This idea should itself change from writing a cheque
for the beneficiary to institutional arrangements to care for beneficiaries,
including by enabling them to look after themselves, to a large extent.
The write-a-cheque model of social security is a legacy from the rich
world at the optimal phase of its demographic transition, when the
working population was numerals enough and earning enough to
generate the taxes to pay for the care of those not working. This model is
ill-suited for less, well-off India with growing life expectancy, increasing
urbanization and resultant migration. Social security under urbanization
will be different from social security in a static society.

Questions : 
(1) What kind of conceptual change is suggested in the given paragraph.
(2) Which features of India make the traditional model of social security
ill-suited for the economy?

Verify your answers with the model answers given on this link.
http://bit.ly/38aXCjU

2 Self-Test 9, Chapter 8 – Economics : Std XII