Correct Answer:
A. Government expenditure exceeds government revenue
The gap is financed by borrowing or other financing.
November 13, 2026 · Accounting and Finance MCQs, Public Finance & Budgeting MCQs
A budget deficit occurs when:
Related MCQs
An example of a direct tax is:
A.
Sales tax
B.
Customs duty
C.
Excise duty
D.
Income tax
Correct answer is:
D. Income tax
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An audit committee is mainly responsible for:
A.
Preparing the financial statements
B.
Setting the audit fees without any approval
C.
Selling the company's assets
D.
Overseeing financial reporting, internal control and the audit process on behalf of the board
Correct answer is:
D. Overseeing financial reporting, internal control and the audit process on behalf of the board
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The crowding-out effect refers to:
A.
Private investment increasing government revenue
B.
Government borrowing raising interest rates and reducing private investment
C.
Government spending reducing unemployment
D.
Taxes reducing consumption only
Correct answer is:
B. Government borrowing raising interest rates and reducing private investment
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Annual demand is 3,600 units, ordering cost is Rs. 100 per order and holding cost is Rs. 8 per unit per year. The EOQ is:
A.
300 units
B.
600 units
C.
450 units
D.
90 units
Correct answer is:
A. 300 units
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In a bank reconciliation, outstanding (unpresented) cheques are:
A.
Deducted from the bank statement balance to find the adjusted bank balance
B.
Added to the bank statement balance
C.
Deducted from the cash book balance
D.
Ignored
Correct answer is:
A. Deducted from the bank statement balance to find the adjusted bank balance
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The present value of future cash flows is Rs. 150,000 and the initial investment is Rs. 100,000. The profitability index is:
A.
1.5
B.
0.67
C.
50,000
D.
2.5
Correct answer is:
A. 1.5
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