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This set of Public Finance Multiple Choice Questions & Answers (MCQs) focuses on Public Finance Set 2
Q1 | If interest payments are subtracted from gross fiscal deficit, the remainder will be
- revenue deficit
- gross primary deficit
- capital deficit
- budgetary deficit
Q2 | Interest payment is an item of
- revenue expenditure
- capital expenditure
- plan expenditure
- none of these
Q3 | The basis of corporate tax is
- total turnover of the company
- profit after distribution of dividend
- profit before distribution of dividend
- capital employed in the company
Q4 | Federalism refers to a
- relationship between the national and state governments.
- relationship among the state governments.
- political system in which power is vested in the state governments.
- political system in which power is vested in the national government.
Q5 | The objective of taxation by the Government are –
- raising revenue for the state
- to maintain economic stability
- to remove disparities in the distribution of income
- all of the above
Q6 | Which of the following is not a direct tax?
- personal income tax
- service tax
- wealth tax
- corporate income tax
Q7 | Transfer Payments include
- old age pension
- subsidies
- wealth tax
- corporate income tax
Q8 | 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.
Q9 | The following is a characteristic of indirect tax –
- the impact and incidence are not on the same person.
- it is levied on income.
- taxes are progressive in nature.
- all of the above
Q10 | Special assessment is also known as
- tax revenue
- battement levy
- vat
- none of the above
Q11 | Impact of a tax refers to
- final money burden
- immediate money burden
- indirect real burden
- none of the above
Q12 | Which factor has no role in the shifting of a tax?
- change in prices
- elasticity of demand and supply
- nature of demand
- income of the consumer
Q13 | Which of the following is not a direct tax?
- income tax
- wealth tax
- gift tax
- service tax
Q14 | Which of the following is administrative non-tax revenue?
- fees
- gifts
- grants
- profits of govt. enterprises
Q15 | Which of the following is not an indirect tax?
- sales tax
- custom duty
- excise duty
- gift tax
Q16 | Generally, the nature of indirect tax is ……………
- progressive
- regressive
- proportional
- none of the above
Q17 | Direct tax are………….. in nature.
- progressive
- equitable
- regressive
- none of the above
Q18 | The term incidence of taxation refers to .....
- initial burden of the tax
- final burden of the tax
- burden of tax on government
- none of the above
Q19 | Debts which have to be paid at some specific future date are known as
- redeemable debts
- irredeemable debts
- treasury
- none of the above
Q20 | Which is / are the advantages of redemption of debt.
- saves the government from bankruptcy
- reduces cost
- saves future generation from the pressure of public debt
- all of the above
Q21 | Pick out the item which is not a part of tax revenue.
- interest
- corporate tax
- excise
- customs
Q22 | The term fiscal federalism was introduced by
- dalton
- seligman c
- musgrave
- none of the above
Q23 | The theory of fiscal federalism assumes –
- a federal system of government can be efficient and effective in solving problems.
- a federal government will be able to bring about economic stability allocation of resources.
- since states and localities are not equal in their income, federalism is helpful.
- all of the above
Q24 | An empirical law to the effect of growing public expenditure was propounded by
- wagner
- peacock
- wiseman
- none of these
Q25 | Productive debts are utilized for ........
- transfer payments in form of subsidies
- they are raised for financing wars
- they add to productive capacity of the economy
- special incentives to weaker sections