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This set of Public Finance Multiple Choice Questions & Answers (MCQs) focuses on Public Finance Set 5
Q1 | According to Peackock Wiseman hypothesis, A discontinuity in the growth pattern whichproduces expenditure peak during social disturbances is referred to as:
- displacement effect
- concentration effect
- inspection effect
- substitution effect
Q2 | The theory of fiscal policy derives from
- principle of sound finance
- n.i. analysis
- welfare economics
- none of these
Q3 | Fiscal Federalism refers to
- sharing of political power between centre and states
- organising and implementing economic plans
- division of economic functions and resources among different layers of government
- none of these
Q4 | Marginal cost of providing the public goods to additional consumers is:
- 0
- 1
- 2
- 3
Q5 | Mixed goods are those goods having benefits which are:
- rival
- non-rival
- both a & b
- none of these
Q6 | Escheat is an example of
- direct tax
- indirect tax
- both a & b
- none of these
Q7 | Gift tax was introduced in the year
- 1958
- 1959
- 1960
- 1961
Q8 | _________ is a broad based and a single comprehensive tax levied on goods and servicesconsumed in an economy
- vat
- cenvat
- gst
- none of these
Q9 | In India GST was introduced in the year
- 2016
- 2017
- 2018
- 2019
Q10 | ______________________ is the first country to implement GST
- usa
- u k
- canada
- france
Q11 | In which year GST was first introduced
- 1952
- 1953
- 1954
- 1955
Q12 | The movement from older level of expenditure and taxation to a new and higher level is called
- concentration effect
- inspection effect
- displacement effect
- none of these
Q13 | The diffusion theory was associated with the name of
- dalton
- keynes
- r a musgrave
- mansfield
Q14 | The existence of economic inequalities among the states is known as
- vertical imbalance
- horizontal imbalance
- parallel imbalance
- none of these
Q15 | When expenditure exceeds total tax revenue, it is called:
- surplus budget
- balanced budget
- deficit budget
- none of these
Q16 | The Benefit Principle of taxation states that tax should be paid in proportion to:
- income
- expenditure
- benefit
- utility
Q17 | The most accepted theory of taxation in modern times:
- benefit theory
- cost of service
- financial theory
- ability theory
Q18 | In which of the following type of economy, the revenue from taxation is likely to be the least?
- free market economy
- keynesian economy
- mixed economy
- socialist economy
Q19 | The horizontal fiscal imbalance that arises in a fiscal federation is also called:
- problem of equalisation
- problem of efficiency
- problem of effectiveness
- problem of economy
Q20 | Tax revenue sharing between the federal and sub-national governments is aimed at correctingwhich of the following type of imbalances?
- vertical imbalances
- horizontal imbalances
- diagonal imbalances
- criss-cross imbalances
Q21 | In a free market economy, self-interested individuals operate through a system of mutualinterdependence to promote the general benefit of society at large. Adam Smith referred this as:
- invisible hand
- direct intervention
- collective spirit
- private spirit
Q22 | Expenditure incurred by the Government on building durable assets, like highways, multipurposedams, irrigation projects are in the nature of
- capital expenditure
- revenue expenditure
- transfer expenditure
- unproductive expenditure
Q23 | Which of the following describes the situation where revenues and expenditures are equal duringa given period?
- public debt
- budget surplus
- balanced budget
- budget deficit
Q24 | During the process of economic development, the share of public expenditure to Gross DomesticProduct tends to expand. This is called:
- wagner’s law
- keynes law
- adam smith’s theory
- brettonwoods law
Q25 | The principle of public expenditure that requires that Government should avoid shortfall ofrevenue in comparison with its expenditure is termed as
- canon of deficit
- canon of surplus
- canon of elasticity
- canon of sanction