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This set of Public Economics Multiple Choice Questions & Answers (MCQs) focuses on Public Economics Set 1

Q1 | When expenditure exceeds total tax revenue, it is called:
  • surplus budget
  • balanced budget
  • deficit budget
  • none of these
Q2 | A pure private good is subject to:
  • non exclusion
  • exclusion
  • low satisfaction
  • none of thse
Q3 | Which of the following is not a fiscal instrument?
  • open market operations
  • public expenditure
  • taxation
  • none of these
Q4 | An increase in tax rate when tax base expands represents:
  • progressive taxation
  • regressive taxation
  • proportional taxation
  • none of these
Q5 | The main difference between Public and Private Finance is:
  • balance of income‐expenditure
  • coerciveness of fiscal power to raise income:
  • dissaving
  • borrowings
Q6 | The name of the Chairman of the 11th Finance Commission
  • k.c. pant
  • a.m. kushro
  • r. j. chelliah
  • n.k.p. salve
Q7 | Income tax is based on the principle of:
  • ability to pay
  • willingness to pay
  • benefits received
  • none of these
Q8 | The Principle of Maximum Social Advantage is associated with:
  • dalton
  • pigou
  • seligman
  • hicks
Q9 | Which is not the characteristic of a tax?
  • import content
  • compulsory payment
  • non –compulsory payment
  • punishment to tax evader
Q10 | Special assessment means:
  • general tax on all people
  • gift tax
  • a tax for specific benefit conferred
  • none of these
Q11 | Classical canons of taxation are propounded by:
  • adam smith
  • bastable
  • dalton
  • keynes
Q12 | The Kelkar Proposals are concerned with:
  • recommendations for re4forms in the power sector
  • recommendations for tax reforms
  • guidelines for the privatization of public sector undertakings
  • none of the above
Q13 | Value Added Tax is:
  • direct tax
  • indirect tax
  • progressive tax
  • none of these
Q14 | In the case of direct tax, impact and incidence are on:
  • different person
  • same person
  • sellers
  • none of these
Q15 | The direct violation of Tax law is called:
  • tax evasion
  • tax avoidance
  • tax rebate
  • none of these
Q16 | The final resting place of the burden of tax is called:
  • tax avoidance
  • tax evasion
  • impact
  • incidence
Q17 | Incidence of tax refers to:
  • initial resting place of the burden of tax
  • final resting place of the burden of tax
  • both (a) and (b)
  • none of these
Q18 | A tax levied at 5 percent on the first Rs. 10,000 of income, 10 percent on the next Rs 20,000and 12 percent on the next Rs 30,000 would be:
  • progressive
  • degressive
  • regressive
  • proportional
Q19 | Which of the following taxes is the most likely to be regressive?
  • sales tax on mobile phone
  • excise duties on kerosene
  • import duties on electronic goods
  • entrainment tax
Q20 | Impact of tax refers to:
  • initial resting place of the burden of tax
  • tax evasion
  • the final money burden of tax
  • none of these
Q21 | Fiscal policy is the policy of:
  • rbi
  • nabard
  • government
  • all the above
Q22 | The principle of judging fiscal measures by the way they work is called:
  • personal finance
  • public finance
  • functional finance
  • local finance
Q23 | When individuals with unequal tax paying ability should be taxed unequally in order toequalise sacrifice is called:
  • horizontal equity
  • vertical equity
  • tax paying ability
  • none of these
Q24 | The following is an example of direct taxes:
  • sales tax
  • income tax
  • estate duties
  • toll tax
Q25 | If the rate of tax falls with an increase in income, it is called:
  • proportional tax
  • progressive tax
  • regressive tax
  • none of these