Exercise 2

Question 1 :

Our financial system has provided for the transfer of resources from the centre to the states; the important means of resource transfer are

A). tax sharing
B). grant-in-aids
C). loans
D). All the above
Answer : Option D

Question 2 :

Debenture holders of a company are its

A). shareholders
B). creditors
C). debtors
D). directors
Answer : Option B

Question 3 :

Excise duty is a tax levied on the

A). import of goods
B). export of goods
C). production of goods
D). sale of goods
Answer : Option C

Explanation :

What is Excise Duty? Is it collected by the State Government or the Central Government? How is it different from Sales Tax?

Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty and is collected in terms of Section 3 of the Central Excise Act, 1944.

Sales Tax is different from the Excise duty as former is a tax on the act of sale while the latter is a tax on the act of manufacture or production of goods.

Question 4 :

In pursuance with the recommendations of Narsimhan Committee, the RBI has framed new guidelines

A). to govern entry of new private sector banks to make the banking sector more competitive
B). to reduce the freedom given to banks to rationalize their existing branch network
C). to setup more foreign exchange banks
D). to lend more easily for industrial development
Answer : Option A

Question 5 :

Which of the following is the first Indian private company to sign an accord with Government of Myanmar for oil exploration in two offshore blocks in that country?

A). Reliance Energy
B). Essar Oil
Answer : Option B