Topic Details (Notes format)

Fiscal Policy and Budget

Subject: Economics

Book: Comprehensive Indian Economy

Fiscal policy involves government spending, taxation, and borrowing to steer the economy. In India, the annual Union Budget outlines revenue and expenditure plans, revealing priorities for sectors like infrastructure, agriculture, and social welfare. Concepts like revenue deficit, fiscal deficit, and primary deficit are central to gauging fiscal health. The Fiscal Responsibility and Budget Management (FRBM) Act sets targets to maintain fiscal discipline. Exam readiness requires clarity on how changes in tax structures—like GST—and public spending shape economic growth, plus an understanding of how deficits are managed through market borrowings and bond issuances.

Practice Questions

What is the term for the ability of an economy to produce more output from the same inputs?

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Which of the following is an example of a non-renewable resource?

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What does the term “elasticity of demand” measure?

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Which economic concept is described as “the next best alternative foregone”?

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What is meant by “structural unemployment”?

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What is the main feature of a free-market economy?

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What is “inclusive growth”?

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Which term refers to the decrease in the value of a currency relative to foreign currencies?

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Which organization publishes the Human Development Index (HDI)?

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Which is the largest source of tax revenue for the Government of India?

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