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This set of Public Finance Multiple Choice Questions & Answers (MCQs) focuses on Public Finance Set 1
Q1 | A progressive income tax implies that
- the amount of tax falls with a rise in income
- the rate of rises with a rise in income
- both (a) and (b)
- the rate of tax decreases with a rise in income
Q2 | A forward-shifted tax will affect
- buyers more than sellers
- sellers more than buyers
- buyers and sellers equally
- government revenues negatively
Q3 | If with the increase in income, the percentage of income collected as tax remains constant, tax will becalled
- regressive
- progressive
- proportional
- neutral
Q4 | Repayment of public debt refers to
- discharging duties
- redemption of public debt
- repayment
- recovery
Q5 | Which of the following canon of taxation is given by Adam Smith
- canon of diversity
- canon of simplicity
- canon of economy
- canon of productivity
Q6 | Tobin tax is a tax on
- taxation in the share market
- transaction in the money market
- transaction on the commodity market
- transaction on the foreign exchange market
Q7 | In case of deficit budget, when the deficits are covered through taxes, that budget is called:
- unbalanced budget
- surplus budget
- balanced budget
- none of these
Q8 | Expenditure tax was introduced in India as per the recommendation of ………………
- nehru
- kaldor
- k n raj
- john mathai
Q9 | Wealth tax was abolished in
- 2011
- 2012
- 2014
- 2015
Q10 | According to Wiseman and peacock, public expenditure will increase in a
- smooth manner
- reverse manner
- step – like manner
- none of the above
Q11 | Canons of budgeting was given by
- adam smith
- h d smith
- marshall
- dalton
Q12 | Concept of concentration and displacement effect in public expenditure are attributed to
- allen t. peacock and jack wiseman
- a r prest and i m d little
- a c pigou and j k mehta
- kenneth arrow and paul a samuelson
Q13 | The greater the elasticity of supply, the greater is
- incidence of tax on buyers
- incidence of tax on sellers
- impact of tax on sellers
- impact of tax on buyers
Q14 | The ability to pay principle of taxation is logically most consistent with the normative notion of :
- tax neutrality
- horizontal equity
- value – added taxation
- vertical equality
Q15 | Which committee recommended tax on agriculture holding in India?
- tandor committee
- raj committee
- kelkar committee
- dantwala committee
Q16 | With a regressive tax, as income
- increases, tax rate remains the same
- decrease, the tax rate decreases
- increases, the tax rate increases
- increases, the tax rate decreases
Q17 | The principle of maximum social advantage is concerned with
- taxation
- expenditure
- public debt
- both taxation and public expenditure
Q18 | Justice in taxation is best ensured by applying the principle of
- equal absolute sacrifice
- equal proportional sacrifice
- equal marginal sacrifice
- quid pro quo
Q19 | Agriculture income tax is a source of revenue to
- central government
- state government
- local administration
- central and state government
Q20 | Ad Valorom means
- according to value
- according to weight
- according to size
- according to advertisement costs
Q21 | Octrio is levies and collected by
- centre
- state government
- local bodies
- all of the above
Q22 | The relationship between tax collections and tax rates has been expressed by
- lorenz curve
- engel’s law
- laffer curve
- indifference curve
Q23 | All taxes come under
- capital receipt
- revenue receipt
- public debt
- public expenditure
Q24 | The merit of zero-based budgeting is that
- tax liability is reduced
- profit go up
- deficit financing becomes zero
- expenditure is rationalized
Q25 | The concept of Zero-Based-Budget(ZBB) was given by
- ra musgrave
- jm keynes
- peter a pyhr
- ah hancen