Dear Readers, Here we have given Practice English Reading Comprehension quiz and questions for SBI PO 2018 Exams with detailed explanation. Candidates those who are preparing for Upcoming Bank Exams can make use of it.
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Direction (1-10): Read the passage carefully and answer the following questions.
According to the traditional definition, Public finance is that branch of Economics which deals with, the income and expenditure of a public sector organization, normally government or federal organization. In the words of Adam Smith “The investment into the nature and principles of state expenditure and state revenue is called public finance“.
The earlier economists were perfectly correct in giving this definition of the science of public finance because the functions of the public authorities in those days were simply to raise revenue by imposing taxes for covering the cost of administration and defense.
The scope of public finance now-a-days has widened too much. It is due to the fact that modern states have to perform multifarious functions to promote the welfare of its citizens. In addition to maintaining law and order within the country and provision of security from external aggression, it has to perform many economic and commercial functions.
Due to the increased activities of the state, there has been vast increase in the expenditure of the public authorities. The sources of revenue have also increased. Taxes are levied not for raising the revenue alone but are used as an important instrument of economic policy.
Modern concept of Public finance defines the role of the government in the economy. It is the study of the effects of budgets on the economy, particularly the effect on the achievement of the major economic objects—growth, stability, equity and efficiency.
It also deals with fiscal policies which ought to be adopted to achieve certain objectives such as price stability, economic growth, more equal distribution of income etc.
Public finance is a concept that includes public expenditure, public debt, public revenue, financial administration and economic Stabilisation. Public revenue is exactly income generated from sources of government in order to meet requirements of expenses of public.
Public revenue generally refers to government revenue. Some important sources that are included in public revenue consist of taxes, fees, sale of public goods and services, fines, donations, etc.
Fee is a payment to defray the cost of each recurring service commence by the government, primarily in the public interest.
A license fee is paid in those instances in which the government authority is invoked simply to confer permission or a privilege. It is the considerable part of public revenue. The profits of Public Sector Units (PSUs) are another source of revenue for the government of India.
Tax is a duty and not a penalty. Most part of revenue income is generated from tax by the central government.
Fines and penalties are the charges imposed on persons as a punishment for contravention of a law. The main purpose of these is not to raise revenue from the public but to force them to follow law and order of the country.
Gifts are voluntary contribution from private individuals or non-government donors to the government fund for specific purposes such as relief fund, defence fund during war or an emergency. However, this source provides a small portion of government revenue.
Like public revenue, public debt has also become a prominent feature of modern public finance. Sometimes public debt is, also referred to as government debt, represents the total outstanding debt of a country’s central government. Public debt is an important source for a government to finance public spending and fill holes in the budget. Public debt as a percentage of GDP is usually used as an indicator of the ability of a government to meet its future obligations.
Financial administration also comes under the scope of public finance. Under this, the problem of how the financial machinery of government is organized and administered is dealt with.
The analysis of public finance also includes the concept of public expenditure. Public expenditure studies how the government distributes the resources for the fulfillment of various responsibilities. It also studies principles that the government should keep in view while allocating resources to various sectors.
On the other hand, different from public finance, private finance deals with the income and expenditure of the private sector or it can be said that private finance means the financial concerns of individual economic unit, i.e., a household, a shop, a firm etc.
Modern economies are monetized, that is goods and services are exchanged through a medium of money and both public & private sector create and use financial claims. Both are engaged in activities that involve purchase, sales and other transactions. Both are thus engaged in production of
goods and service, exchange goods & services, save capital and invest capital to create more wealth and capital.
1) According to the passage, what is the largest source of public revenue?
a) fine and penalties
b) surplus of public sector undertaking
c) public borrowing
2) According to the passage, which of the following economic instruments helps the government in meeting the budgetary deficit?
a) public revenue
b) financial administration
c) public debt
d) financial administration
e) foreign currency reserve
3) In the passage, according to the traditional concept of public finance, its main work was to
a) maintain the economic stability
b) generate the employment
c) accelerate the economic growth
d) impose the taxation policy
e) distribute the income equally
4) According to the passage, what does help the government in allocation of resources for the completion of various obligations?
a) public expenditure
b) public debt
c) public revenue
d) financial administration
e) federal finance
5) Which of the following statements is true in the context of the passage?
a) tax is a penalty and not a duty.
b) like public finance, private finance is also engaged in production and exchange of goods and services.
c) analysis of public finance includes the technique of production.
d) none of the above
e) All are true
6) Find the incorrect statement on the basis of the given passage.
a) The scope of public finance has contracted.
b) Public debt as a percentage of GDP is an indicator of the ability of a government to meet its future obligations.
c) License fee is considerable part of public revenue.
d) Modern concept of Public financedefines the role of the government in the economy.
e) All are correct
7) Choose the word which as same meaning as the word defray
b) be obligated
d) be indebted
e) be obliged
8) Choose the word which as same meaning as the word confer
a) call off
9) Choose the word which as opposite meaning as the word multifarious
10) Choose the word which as opposite meaning as the word contravention
1.Correct Answer is: e)
It is clearly mentioned in the passage that taxes are the main source of revenue for government.
2.Correct Answer is: c)
It is given in the passage that Public debt is an important source for the government to finance public spending and fill holes in the budget. It means to meet the rising expenditure, if the revenue obtains through taxation is not sufficient then, modern governments have to borrow to meet their expanding expenditure on various activities.
3.Correct Answer is: d)
It is clearly given in the passage that according to the traditional concept of public finance the work of government and public authorities was to raise revenue by imposing taxes for covering the cost of administration and defense.
4.Correct Answer is: a)
It is clearly mentioned in the passage that public expenditure studies how the government distributes the resources for the fulfillment of various responsibilities.
5.Correct Answer is: b)
According to the passage, true statement is “like public finance, private finance is also engaged in production and exchange of goods and services.”
6.Correct Answer is: a)
It is mentioned in the passage that the scope of public finance now-a-days has widened too much. It is due to the fact that modern states have to perform multifarious functions to promote the welfare of its citizens.
7.Correct Answer is: c)
The meaning of “defray” is “pay / settle/ discharge”
8.Correct Answer is: e)
The meaning of “confer” is “award/ give /grant”.
9.Correct Answer is: b)
The meaning of “multifarious” is “diverse / heterogeneous” and its opposite is “homogeneous /corresponding”.
10.Correct Answer is: c)
The meaning of “contravention” is “infringement” and its opposite is “observance”.
Daily Practice Test Schedule | Good Luck
|Topic||Daily Publishing Time|
|Daily News Papers & Editorials||8.00 AM|
|Current Affairs Quiz||9.00 AM|
|Quantitative Aptitude “20-20”||11.00 AM|
|Vocabulary (Based on The Hindu)||12.00 PM|
|General Awareness “20-20”||1.00 PM|
|English Language “20-20”||2.00 PM|
|Reasoning Puzzles & Seating||4.00 PM|
|Daily Current Affairs Updates||5.00 PM|
|Data Interpretation / Application Sums (Topic Wise)||6.00 PM|
|Reasoning Ability “20-20”||7.00 PM|
|English Language (New Pattern Questions)||8.00 PM|