MCQ

upsc-p1-economy-public-finance-fc MCQ - Practice Questions with Answers

Solve 2 upsc-p1-economy-public-finance-fc questions for RAS/RPSC preparation.

Practice questions

Q1Match List I with List II: List I (Horizontal-devolution criterion) 1. Income distance 2. Population 3. Forest and ecology 4. Tax effort List II (Primary signal) A. Revenue mobilisation relative to capacity B. Expenditure need C. Equalisation for lower-income States D. Compensation for national environmental services Select the correct answer using the code given below.

A 1-B, 2-C, 3-D, 4-A

B 1-C, 2-D, 3-B, 4-A

C 1-D, 2-B, 3-A, 4-C

D 1-C, 2-B, 3-D, 4-A

Explanation

Income distance is the equalisation core for lower-income States; population represents expenditure need; forest and ecology recognise national environmental services; and tax effort rewards revenue mobilisation relative to capacity. The correct matching is 1-C, 2-B, 3-D, 4-A.

Q2Consider the following statements: Statement I: Population in a horizontal-devolution formula captures expenditure need. Statement II: Demographic performance is used to balance the population criterion by recognising better performance in fertility and demographic transition. Which one of the following is correct? Select the correct answer using the code given below.

A Both Statement I and Statement II are correct, and Statement II explains why the population criterion is balanced

B Both Statement I and Statement II are correct, but Statement II is unrelated to balancing the population criterion

C Statement I is correct, but Statement II is incorrect

D Statement I is incorrect, but Statement II is correct

Explanation

Both statements are correct, and Statement II explains the balancing role. Population represents current expenditure need, while demographic performance recognises States that performed better in fertility reduction and demographic transition, reducing the risk that such performance is penalised.

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