Public Economics Set 2 MCQs

Q1 | Which is the method of financial adjustment between Centre and States?

tax sharing

grant‐in‐aid

public debt

federal finance

Q2 | Who suggested an expenditure tax as an alternative to income tax?

musgrave

galbraith

dalton

kaldor

Q3 | Budget is an instrument of:

monetary policy

fiscal policy

trade policy

exchange rate policy

Q4 | The concept of functional finance was developed by:

j.m. keynes

a.p. lerner

kaldor

pigou

Q5 | The modern state is:

laissez –faire state

welfare state

aristocratic state

police state

Q6 | According to Musgrave the major functions of public finance is:

allocative function

distributive function

stabilisation function

all the above

Q7 | Who is the author of the book “The Theory of Public Finance”?

dalton

r.a. musgrave

a.r. prest

harvey rosen

Q8 | A criterion by which public goods are distinguished from private goods:

exclusion principle

externality principle

public choice principle

none of the above

Q9 | Who was the first to recommend the adoption of an expenditure tax for India?

k.n. raj

paul krugman

raja j. chelliah

n. kaldor

Q10 | The controlling authority of Government expenditure is:

rbi

planning commission

ministry of finance

finance commission

Q11 | The idea of ‘Democratic Decentralization’ in India was popularized by:

a.d. gorwala committee, 1951

b.r. mehta committee, 1957

ashok mehta committee, 1978

none of these

Q12 | 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

Q13 | The incidence of tax refers to:

the level and rate of taxation

who ultimately pays the tax

the growth of taxation

the way in which tax is collected

Q14 | The theory of fiscal policy derives from

principle of sound finance

n.i. analysis

welfare economics

none of these

Q15 | The most important source of public revenue is

fees

commercial revenue

tax

fines & penalties

Q16 | 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 govt.

none of these

Q17 | Which one of the following is an optional function of Government?

defense

old age security

law and order

none of these

Q18 | Principle of sound finance refers to

maximum government spending

minimum government spending

revenue expenditure balanced at the minimum level

balance between tax and spending

Q19 | Private goods are characterized by

application of exclusion principle

rivalry in consumption

payment of prices

all the above

Q20 | Tax refers to10

compulsory contribution

payment by the people to government

no direct return for the payment

all the above

Q21 | . Pump priming is

injection of purchasing power into the public through government spending

withdrawal of purchasing power from the public

balancing revenue and expenditure

none of the above

Q22 | Merit goods means

private goods

public goods

subsidized private goods

none of these

Q23 | The most important aim of fiscal policy in a developing country is

economic stability

economic development

regional balance

none of these

Q24 | The income of the government through all its sources is called

public expenditure

public revenue

public finance

none of these

Q25 | Which of the following are indirect taxes?

customs duties

excise duties

sales tax

all the above