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This set of Public Finance Multiple Choice Questions & Answers (MCQs) focuses on Public Finance Set 6
Q1 | The ratio of change in the national income in relation to the change in government spending thatcauses it is referred to as:
- fiscal multiplier
- spending ratio
- expenditure ratio
- cost multiplier
Q2 | Which of the following occurs when all taxes and other revenues exceed governmentexpenditures for a year?
- public debt
- budget surplus
- balanced budget
- budget deficit
Q3 | Public goods have two criteria, one of which is non-excludability. What does that mean?
- it is not possible to exclude individuals from consumption.
- it is not possible to produce them without externalities
- consumption by one does not affect consumption of others
- a and c.
Q4 | The role of the Finance Commission in Central-State fiscal relations has been undermined by
- the state governments
- the zonal councils
- the planning commission
- the election commission
Q5 | The term ‘Performance Budget’ was coined by
- administrative reforms commission of india
- second hoover commission of usa
- estimates committee of india
- first hoover commission of usa
Q6 | If the public debt can be financed without adding to inflation or causing interest rates to rise, it issaid to be:
- only a burden on future generations.
- in primary balance
- sustainable
- following the golden rule of the public finances.
Q7 | Progressive Tax System is that system in which what happens in the rate of tax if there is anincrease in income?
- destruction
- becomes equal
- growth
- becomes unequal
Q8 | Statutory incidence of a tax deals with
- the amount of revenue left over after taxes.
- the amount of taxes paid after accounting for inflation.
- the person(s) legally responsible for paying the tax.
- the amount of tax revenue generated after a tax is imposed.
Q9 | Who deals with income and expenditure of public authorities?
- public finance
- private finance
- local govt
- none of these
Q10 | Unfunded debts are those debts which are paid back within …………
- two year
- one year
- three year
- six months
Q11 | Which one of the following is not a feature of private finance:
- balancing of income and expenditure
- secrecy
- saving some part of income
- publicity
Q12 | Government budget is balanced when
- govt. expenditure outstrips tax receipts
- govt. tax receipts outstrips expenditure
- govt. expenditure equals tax revenues
- none of the above
Q13 | The government can collect funds from
- taxes
- fees
- prices of public goods
- all the three
Q14 | Progressive taxes:
- increase government revenue
- bring equality in distribution of incomes
- act as penalty for rich people
- both a and b
Q15 | The most important source of revenue to the states is
- sales tax
- service tax
- excise duty
- none of the above
Q16 | The tax levied on the interstate trade of goods is
- sales tax
- excise tax
- service tax
- central sales tax
Q17 | Which of the following taxes is/are withdrawn or abolished?
- interest tax
- estate duty
- gift tax
- all the above
Q18 | ………………...is that process in which taxpayer tries to shift burden of tax on others.
- impact of tax
- shifting of tax
- incidence of tax
- elasticity of tax
Q19 | Shifting of tax depends on ..............of goods.
- elasticity
- quality
- quantity
- durability
Q20 | The tax levied by the union government on income of individuals is known as
- personal income tax
- interest tax
- wealth tax
- corporation tax
Q21 | The tax on net income of companies is
- personal income tax
- interest tax
- wealth tax
- corporation tax
Q22 | All type of income received to government is called .............. income.
- private
- public
- company
- partnership
Q23 | The difference between total expenditure and total receipts is
- fiscal deficit
- budget deficit
- primary deficit
- revenue deficit
Q24 | Lump sum taxes
- create no excess burden.
- are not as widely used as other forms of taxation.
- generally lack a sense of equity.
- all of the above
Q25 | Externalities can be positive because
- marginal damages do not last over time.
- utility can be impacted positively as well as negatively.
- there is no concept for marginal benefit.
- positive externalities are subsidies.