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This set of Public Economics Multiple Choice Questions & Answers (MCQs) focuses on Public Economics Set 4
Q1 | Printing of new currency notes and RBI borrowings by government is called:
- Government Loans.
- Government Securities.
- Government Bonds.
- Deficit Financing.
Q2 | Which of the following is not a characteristic of a tax?
- It is a compulsory payment.
- Every tax involves a sacrifice by tax payer.
- There is a quid-pro-quo between the tax payer and the Government.
- Refusal to pay tax is a punishable offence.
Q3 | Which of the following is not the broad component of Property Rights?
- The right to use the good.
- The right not to transfer the good to others.
- The right to earn income from the good.
- The right to enforce property rights.
Q4 | When property rights are settled by means of bargaining or negotiating terms, what has been applied?
- A good deal.
- A bad deal.
- Cloud theorem.
- Coase theorem.
Q5 | Following are some of examples of Transfer Expenditure EXCEPT:
- Interest payments on public debt.
- Social infrastructure such as education, health and family welfare.
- Unemployment allowances.
- Subsidies.
Q6 | All other things being equal, a substantial cut in the rate of income tax in the short run is most likely to reduce:
- The government budget deficit.
- Spending on imports.
- Unemployment.
- Inflation.
Q7 | Which of the following is NOT the effect of taxation on production?
- Effects on the distribution of income and wealth.
- Effects on the ability to work, save and invest.
- Effects on the will to work, save and invest.
- Effects on the allocation of resources.
Q8 | A tax either on consumers or on producers:
- Creates a loss only to consumers.
- Creates a loss only to producers.
- Creates a net gain for the society as a whole.
- Creates a dead weight loss for society as a whole.
Q9 | The direct violation of Tax law is called:
- Tax Avoidance.
- Tax Rebate.
- Tax Evasion.
- Tax Incidence.
Q10 | In the case of relatively elastic demand, the money burden of tax is on:
- Entirely on seller.
- More on seller.
- Entirely on buyer.
- More on buyer.
Q11 | With increase in urbanisation and industrialisation, the role of Government started:
- Increasing.
- Declining.
- Stagnant.
- Unstable.
Q12 | Which of the following is NOT the subject matter of Public Finance?
- Public Revenue & Expenditure.
- Business administration.
- Public Debt.
- Fiscal Policy.
Q13 | The most important aim of fiscal policy in a developing country is:
- Public Revenue.
- Regional balance.
- Economic stability.
- Economic development.
Q14 | .If a good is a public good, then:
- People who do not pay can be excluded from consuming the good.
- Consumption is regulated.
- People who do not pay cannot be excluded from consuming the good.
- Consumption is deregulated.
Q15 | A market failure can best be defined as a situation where:
- Markets enable buyers to gain utility.
- Markets fail to allocate resources efficiently.
- Markets fail to enable sellers to make profits.
- Markets encourage people to take risks.
Q16 | The “Tragedy of the Commons” is:
- Discovery of corruption among members of the Society.
- Existence of Market Failure.
- Exhaustion of resources that are collectively owned.
- Outrageous crime in a Boston public park.
Q17 | A tax that takes away a higher proportion of one's income as the income rises is termed as a:
- Progressive Tax.
- Regressive Tax.
- Proportional Tax.
- Indirect Tax.
Q18 | Loans taken by the government for purpose of war, earthquakes for covering budget deficit are:
- Productive Debts.
- Unproductive Debts.
- Voluntary Debts
- External Debts.
Q19 | The incidence of tax refers to:
- The level and rate of taxation.
- The growth of taxation.
- The way in which tax is collected.
- Who ultimately pays the tax.
Q20 | In the case of direct tax, impact and incidence are on:
- Same person.
- Sellers.
- Different person.
- Producer.