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This set of Public Finance Multiple Choice Questions & Answers (MCQs) focuses on Public Finance Set 4
Q1 | The system of assigning the source of revenue to the Central as well as State Governments isgenerally referred to as
- public finance
- distributive finance
- unitary finance
- federal finance
Q2 | The modern state is:
- laissez–faire state
- welfare state
- aristocratic state
- police state
Q3 | Which one of the following is the most acceptable theory of taxation:
- benefit theory
- cost of service theory
- ability to pay theory
- none of these
Q4 | The Indian income tax is:
- direct and proportional
- indirect and proportional
- indirect and progressive
- direct and progressive
Q5 | The main objective of budgeting is:
- planning
- co‐ordination
- control
- all of these
Q6 | Wiseman‐Peacock hypothesis supports in a much stronger manner the possibility of:
- an upward trend in public expenditure
- a downward trend in public expenditure
- a constancy of public expenditure
- a mixed trend in public expenditure
Q7 | A negative externality is
- conflict relation with a foreign country
- deficit in external trade
- hurting effect of a private action on other people
- rain outdoors.
Q8 | The “Tragedy of the Commons” is
- discovery of corruption among members of the british parliament.
- exhaustion of resources that are collectively owned.
- outrageous crime in a boston public park.
- play by arthur miller.
Q9 | Which of the following is a public good?
- house.
- traffic sign.
- both of the above.
- none of the above
Q10 | The provision of public goods requires
- competition among firms in the market
- lobbying
- trade protection
- none of the above.
Q11 | Public goods are those for which
- external costs exist.
- individuals who do not pay cannot be excluded from consuming.
- individuals who do not pay can be excluded from consuming.
- no external costs exist.
Q12 | When consumption of a good is non-rival and non-excludable, the good is a
- public good.
- mixed good.
- private good.
- service.
Q13 | Of those listed below, the best example of a pure public good is
- a radio broadcast.
- a book.
- a rock concert held in a small auditorium.
- a state lottery
Q14 | Non-rivalry is a feature of
- public goods.
- goods but not services.
- excludable goods. d. all non-excludable goo
Q15 | Non-excludability is a feature of
- goods but not services
- goods with an external cost.
- public goods d. all non-rival goo
Q16 | Pure private goods are those for which consumption is
- non-rival and excludable.
- rival and excludable.
- rival and non-excludable.
- non-rival and non-excludable.
Q17 | When consumption is rival and excludable, the product is a
- private good.
- service not a good.
- mixed good. d. public goo
Q18 | A good or service or a resource is non-excludable if
- it is possible to prevent someone from enjoying the benefits of it.
- its use by one person decreases the quantity available for someone else.
- it is not possible to prevent someone from benefiting from it.
- its use by one person does not decrease the quantity available for someone else
Q19 | An uncrowded toll road is ________ because it is ________.
- not a pure public good; non-rival but excludable
- not a pure public good; both rival and excludable
- a pure public good; both non-rival and non-excludable
- not a pure public good; non-excludable but rival
Q20 | A good or service or a resource is excludable if
- it is possible to prevent someone from enjoying the benefits of it.
- its use by one person decreases the quantity available for someone else.
- it is not possible to prevent someone from enjoying the benefits of it.
- its use by one person does not decrease the quantity available for someone else.
Q21 | A good or service or a resource is non-rival if
- it is not possible to prevent someone from enjoying the benefits of it.
- it is possible to prevent someone from enjoying the benefits of it.
- its use by one person decreases the quantity available for someone else.
- its use by one person does not decrease the quantity available for someone else.
Q22 | If the consumption of Good A by one person does not decrease the consumption of Good A byanother person, then the good is said to
- non-excludable.
- excludable.
- non-rival.
- rival.
Q23 | The nature of federalism was changed forever by
- missouri v. department of interior
- gibbons v. ogden.
- the civil war
- chief justice rutledge.
Q24 | Cooperative federalism is characterized by
- increasing power of local governments.
- a stronger, more influential national government.
- a shift in power from the national to state governments.
- stronger state governments.
Q25 | Peacock and Wiseman Hypothesis on public expenditure consists of three concepts which are:
- subscription effect, tax effect, expenditure effect
- tax effect, expenditure effect, consumption effect
- displacement effect, concentration effect, inspection effect
- consumption effect, labour effect, income effect