McqMate
| 1. |
A progressive income tax implies that |
| A. | the amount of tax falls with a rise in income |
| B. | the rate of rises with a rise in income |
| C. | both (a) and (b) |
| D. | the rate of tax decreases with a rise in income |
| Answer» B. the rate of rises with a rise in income | |
| 2. |
A forward-shifted tax will affect |
| A. | buyers more than sellers |
| B. | sellers more than buyers |
| C. | buyers and sellers equally |
| D. | government revenues negatively |
| Answer» A. buyers more than sellers | |
| 3. |
If with the increase in income, the percentage of income collected as tax remains constant, tax will be called |
| A. | regressive |
| B. | progressive |
| C. | proportional |
| D. | neutral |
| Answer» C. proportional | |
| 4. |
Repayment of public debt refers to |
| A. | discharging duties |
| B. | redemption of public debt |
| C. | repayment |
| D. | recovery |
| Answer» B. redemption of public debt | |
| 5. |
Which of the following canon of taxation is given by Adam Smith |
| A. | canon of diversity |
| B. | canon of simplicity |
| C. | canon of economy |
| D. | canon of productivity |
| Answer» C. canon of economy | |
| 6. |
Tobin tax is a tax on |
| A. | taxation in the share market |
| B. | transaction in the money market |
| C. | transaction on the commodity market |
| D. | transaction on the foreign exchange market |
| Answer» D. transaction on the foreign exchange market | |
| 7. |
In case of deficit budget, when the deficits are covered through taxes, that budget is called: |
| A. | unbalanced budget |
| B. | surplus budget |
| C. | balanced budget |
| D. | none of these |
| Answer» A. unbalanced budget | |
| 8. |
Expenditure tax was introduced in India as per the recommendation of ……………… |
| A. | nehru |
| B. | kaldor |
| C. | k n raj |
| D. | john mathai |
| Answer» B. kaldor | |
| 9. |
Wealth tax was abolished in |
| A. | 2011 |
| B. | 2012 |
| C. | 2014 |
| D. | 2015 |
| Answer» D. 2015 | |
| 10. |
According to Wiseman and peacock, public expenditure will increase in a |
| A. | smooth manner |
| B. | reverse manner |
| C. | step – like manner |
| D. | none of the above |
| Answer» C. step – like manner | |
| 11. |
Canons of budgeting was given by |
| A. | adam smith |
| B. | h d smith |
| C. | marshall |
| D. | dalton |
| Answer» B. h d smith | |
| 12. |
Concept of concentration and displacement effect in public expenditure are attributed to |
| A. | allen t. peacock and jack wiseman |
| B. | a r prest and i m d little |
| C. | a c pigou and j k mehta |
| D. | kenneth arrow and paul a samuelson |
| Answer» A. allen t. peacock and jack wiseman | |
| 13. |
The greater the elasticity of supply, the greater is |
| A. | incidence of tax on buyers |
| B. | incidence of tax on sellers |
| C. | impact of tax on sellers |
| D. | impact of tax on buyers |
| Answer» A. incidence of tax on buyers | |
| 14. |
The ability to pay principle of taxation is logically most consistent with the normative notion of : |
| A. | tax neutrality |
| B. | horizontal equity |
| C. | value – added taxation |
| D. | vertical equality |
| Answer» D. vertical equality | |
| 15. |
Which committee recommended tax on agriculture holding in India? |
| A. | tandor committee |
| B. | raj committee |
| C. | kelkar committee |
| D. | dantwala committee |
| Answer» B. raj committee | |
| 16. |
With a regressive tax, as income |
| A. | increases, tax rate remains the same |
| B. | decrease, the tax rate decreases |
| C. | increases, the tax rate increases |
| D. | increases, the tax rate decreases |
| Answer» D. increases, the tax rate decreases | |
| 17. |
The principle of maximum social advantage is concerned with |
| A. | taxation |
| B. | expenditure |
| C. | public debt |
| D. | both taxation and public expenditure |
| Answer» D. both taxation and public expenditure | |
| 18. |
Justice in taxation is best ensured by applying the principle of |
| A. | equal absolute sacrifice |
| B. | equal proportional sacrifice |
| C. | equal marginal sacrifice |
| D. | quid pro quo |
| Answer» C. equal marginal sacrifice | |
| 19. |
Agriculture income tax is a source of revenue to |
| A. | central government |
| B. | state government |
| C. | local administration |
| D. | central and state government |
| Answer» B. state government | |
| 20. |
Ad Valorom means |
| A. | according to value |
| B. | according to weight |
| C. | according to size |
| D. | according to advertisement costs |
| Answer» A. according to value | |
| 21. |
Octrio is levies and collected by |
| A. | centre |
| B. | state government |
| C. | local bodies |
| D. | all of the above |
| Answer» C. local bodies | |
| 22. |
The relationship between tax collections and tax rates has been expressed by |
| A. | lorenz curve |
| B. | engel’s law |
| C. | laffer curve |
| D. | indifference curve |
| Answer» C. laffer curve | |
| 23. |
All taxes come under |
| A. | capital receipt |
| B. | revenue receipt |
| C. | public debt |
| D. | public expenditure |
| Answer» B. revenue receipt | |
| 24. |
The merit of zero-based budgeting is that |
| A. | tax liability is reduced |
| B. | profit go up |
| C. | deficit financing becomes zero |
| D. | expenditure is rationalized |
| Answer» D. expenditure is rationalized | |
| 25. |
The concept of Zero-Based-Budget(ZBB) was given by |
| A. | ra musgrave |
| B. | jm keynes |
| C. | peter a pyhr |
| D. | ah hancen |
| Answer» C. peter a pyhr | |
| 26. |
If interest payments are subtracted from gross fiscal deficit, the remainder will be |
| A. | revenue deficit |
| B. | gross primary deficit |
| C. | capital deficit |
| D. | budgetary deficit |
| Answer» B. gross primary deficit | |
| 27. |
Interest payment is an item of |
| A. | revenue expenditure |
| B. | capital expenditure |
| C. | plan expenditure |
| D. | none of these |
| Answer» A. revenue expenditure | |
| 28. |
The basis of corporate tax is |
| A. | total turnover of the company |
| B. | profit after distribution of dividend |
| C. | profit before distribution of dividend |
| D. | capital employed in the company |
| Answer» A. total turnover of the company | |
| 29. |
Federalism refers to a |
| A. | relationship between the national and state governments. |
| B. | relationship among the state governments. |
| C. | political system in which power is vested in the state governments. |
| D. | political system in which power is vested in the national government. |
| Answer» A. relationship between the national and state governments. | |
| 30. |
The objective of taxation by the Government are – |
| A. | raising revenue for the state |
| B. | to maintain economic stability |
| C. | to remove disparities in the distribution of income |
| D. | all of the above |
| Answer» D. all of the above | |
| 31. |
Which of the following is not a direct tax? |
| A. | personal income tax |
| B. | service tax |
| C. | wealth tax |
| D. | corporate income tax |
| Answer» B. service tax | |
| 32. |
Transfer Payments include |
| A. | old age pension |
| B. | subsidies |
| C. | wealth tax |
| D. | corporate income tax |
| Answer» D. corporate income tax | |
| 33. |
The following is not a characteristic of a tax. |
| A. | it is a compulsory payment |
| B. | every tax involves a sacrifice by tax payer |
| C. | there is a quid-pro-quo between the tax payer and the government. |
| D. | refusal to pay tax is a punishable offence. |
| Answer» C. there is a quid-pro-quo between the tax payer and the government. | |
| 34. |
The following is a characteristic of indirect tax – |
| A. | the impact and incidence are not on the same person. |
| B. | it is levied on income. |
| C. | taxes are progressive in nature. |
| D. | all of the above |
| Answer» A. the impact and incidence are not on the same person. | |
| 35. |
Special assessment is also known as |
| A. | tax revenue |
| B. | battement levy |
| C. | vat |
| D. | none of the above |
| Answer» B. battement levy | |
| 36. |
Impact of a tax refers to |
| A. | final money burden |
| B. | immediate money burden |
| C. | indirect real burden |
| D. | none of the above |
| Answer» B. immediate money burden | |
| 37. |
Which factor has no role in the shifting of a tax? |
| A. | change in prices |
| B. | elasticity of demand and supply |
| C. | nature of demand |
| D. | income of the consumer |
| Answer» D. income of the consumer | |
| 38. |
Which of the following is not a direct tax? |
| A. | income tax |
| B. | wealth tax |
| C. | gift tax |
| D. | service tax |
| Answer» D. service tax | |
| 39. |
Which of the following is administrative non-tax revenue? |
| A. | fees |
| B. | gifts |
| C. | grants |
| D. | profits of govt. enterprises |
| Answer» A. fees | |
| 40. |
Which of the following is not an indirect tax? |
| A. | sales tax |
| B. | custom duty |
| C. | excise duty |
| D. | gift tax |
| Answer» D. gift tax | |
| 41. |
Generally, the nature of indirect tax is …………… |
| A. | progressive |
| B. | regressive |
| C. | proportional |
| D. | none of the above |
| Answer» B. regressive | |
| 42. |
Direct tax are………….. in nature. |
| A. | progressive |
| B. | equitable |
| C. | regressive |
| D. | none of the above |
| Answer» A. progressive | |
| 43. |
The term incidence of taxation refers to ..... |
| A. | initial burden of the tax |
| B. | final burden of the tax |
| C. | burden of tax on government |
| D. | none of the above |
| Answer» B. final burden of the tax | |
| 44. |
Debts which have to be paid at some specific future date are known as |
| A. | redeemable debts |
| B. | irredeemable debts |
| C. | treasury |
| D. | none of the above |
| Answer» A. redeemable debts | |
| 45. |
Which is / are the advantages of redemption of debt. |
| A. | saves the government from bankruptcy |
| B. | reduces cost |
| C. | saves future generation from the pressure of public debt |
| D. | all of the above |
| Answer» D. all of the above | |
| 46. |
Pick out the item which is not a part of tax revenue. |
| A. | interest |
| B. | corporate tax |
| C. | excise |
| D. | customs |
| Answer» A. interest | |
| 47. |
The term fiscal federalism was introduced by |
| A. | dalton |
| B. | seligman c |
| C. | musgrave |
| D. | none of the above |
| Answer» C. musgrave | |
| 48. |
The theory of fiscal federalism assumes – |
| A. | a federal system of government can be efficient and effective in solving problems. |
| B. | a federal government will be able to bring about economic stability allocation of resources. |
| C. | since states and localities are not equal in their income, federalism is helpful. |
| D. | all of the above |
| Answer» D. all of the above | |
| 49. |
An empirical law to the effect of growing public expenditure was propounded by |
| A. | wagner |
| B. | peacock |
| C. | wiseman |
| D. | none of these |
| Answer» A. wagner | |
| 50. |
Productive debts are utilized for ........ |
| A. | transfer payments in form of subsidies |
| B. | they are raised for financing wars |
| C. | they add to productive capacity of the economy |
| D. | special incentives to weaker sections |
| Answer» B. they are raised for financing wars | |
| 51. |
External debts can be raised from ........... |
| A. | individuals |
| B. | rbi |
| C. | commercial banks |
| D. | world bank |
| Answer» D. world bank | |
| 52. |
Debts that are repaid at some specific future date are known as |
| A. | redeemable debts |
| B. | irredeemable debts |
| C. | treasury bill |
| D. | none of the above |
| Answer» A. redeemable debts | |
| 53. |
External loans are raised from |
| A. | idbi |
| B. | icici |
| C. | rbi |
| D. | wto |
| Answer» D. wto | |
| 54. |
The concept of Merit goods was developed by ................ |
| A. | musgrave |
| B. | marshall |
| C. | adam smith |
| D. | zak |
| Answer» A. musgrave | |
| 55. |
Non-rival consumption is the feature of .............. |
| A. | public good |
| B. | private good |
| C. | merit good |
| D. | necessary good |
| Answer» A. public good | |
| 56. |
The theory of second best was introduced by ............... |
| A. | lipse and lancester |
| B. | allen and hicks |
| C. | samuelson and hicks |
| D. | horrod and dommor |
| Answer» A. lipse and lancester | |
| 57. |
Wagner’s Law of increasing ............ activities. |
| A. | central |
| B. | state |
| C. | local |
| D. | one of these |
| Answer» B. state | |
| 58. |
Wiseman-Peacock was studied expenditure of .............. in 1890-1955. |
| A. | ussr |
| B. | usa |
| C. | uk |
| D. | none of these |
| Answer» C. uk | |
| 59. |
Pure theory of public expenditure is based on .............. |
| A. | benefit |
| B. | loss |
| C. | profit |
| D. | none of these |
| Answer» A. benefit | |
| 60. |
Social marginal productivity criteria was developed by ........... |
| A. | malthus |
| B. | a. e. khan |
| C. | a. k. sen |
| D. | none of these |
| Answer» B. a. e. khan | |
| 61. |
Balanced budget means ................ between revenue and expenditure. |
| A. | balance |
| B. | unbalance |
| C. | unequal |
| D. | none of these |
| Answer» A. balance | |
| 62. |
................... budget concept was first introduced in USA in 1964. |
| A. | zero-base |
| B. | no zero-base |
| C. | surplus base |
| D. | none of these |
| Answer» A. zero-base | |
| 63. |
Public debt is the debt owed by ................ |
| A. | industry |
| B. | individual |
| C. | central government |
| D. | bank |
| Answer» C. central government | |
| 64. |
In a concept of budgetary deficit, ............... is always greater than the total revenue. |
| A. | public expenditure |
| B. | taxes amount |
| C. | money supply |
| D. | crr |
| Answer» A. public expenditure | |
| 65. |
The value of balanced budget multiplier is always ................ |
| A. | 0 |
| B. | 1 |
| C. | 2 |
| D. | indefinite |
| Answer» B. 1 | |
| 66. |
............ tax is in the jurisdiction of the Central government. |
| A. | land revenue |
| B. | corporation tax |
| C. | excise on alcohol |
| D. | tax on electricity consumption |
| Answer» B. corporation tax | |
| 67. |
In internal debt ................ are important. |
| A. | external loans |
| B. | market loans |
| C. | personal loans |
| D. | none of these |
| Answer» B. market loans | |
| 68. |
Public debt in Indian Economy is .................... in nature. |
| A. | increasing |
| B. | decreasing |
| C. | constant |
| D. | none of these |
| Answer» A. increasing | |
| 69. |
Fiscal Crisis was carried in ................. period. |
| A. | planning |
| B. | new economic policy |
| C. | before indpendence |
| D. | none of these |
| Answer» A. planning | |
| 70. |
Which of the following is a Revenue Receipt? |
| A. | loan from the imf |
| B. | grant received from the world bank |
| C. | borrowing from the public |
| D. | sale of the shares held by the government in hmt |
| Answer» B. grant received from the world bank | |
| 71. |
Which of the following is a Capital Receipt? |
| A. | profit tax |
| B. | railway ticket fare |
| C. | fee of the government hospital |
| D. | borrowing from the public |
| Answer» D. borrowing from the public | |
| 72. |
Which one of the following is not the form of Tax Revenue? |
| A. | income tax |
| B. | sales tax |
| C. | license fee |
| D. | excise duty |
| Answer» C. license fee | |
| 73. |
Identify the Capital Receipts |
| A. | penalty |
| B. | corporation tax |
| C. | dividends on investments made by the government |
| D. | sale of a public sector undertaking |
| Answer» D. sale of a public sector undertaking | |
| 74. |
Existence of Centre State economic inequalities is known as |
| A. | vertical imbalance |
| B. | horizontal imbalance |
| C. | parallel imbalance |
| D. | none of these |
| Answer» A. vertical imbalance | |
| 75. |
A multilevel decentralized fiscal system involving sharing of fiscal responsibilities between central, state and local governments is referred to as: |
| A. | fiscal union |
| B. | fiscal federalism |
| C. | fiscal equalisation |
| D. | fiscal generalism |
| Answer» B. fiscal federalism | |
| 76. |
The system of assigning the source of revenue to the Central as well as State Governments is generally referred to as |
| A. | public finance |
| B. | distributive finance |
| C. | unitary finance |
| D. | federal finance |
| Answer» D. federal finance | |
| 77. |
The modern state is: |
| A. | laissez–faire state |
| B. | welfare state |
| C. | aristocratic state |
| D. | police state |
| Answer» B. welfare state | |
| 78. |
Which one of the following is the most acceptable theory of taxation: |
| A. | benefit theory |
| B. | cost of service theory |
| C. | ability to pay theory |
| D. | none of these |
| Answer» C. ability to pay theory | |
| 79. |
The Indian income tax is: |
| A. | direct and proportional |
| B. | indirect and proportional |
| C. | indirect and progressive |
| D. | direct and progressive |
| Answer» D. direct and progressive | |
| 80. |
The main objective of budgeting is: |
| A. | planning |
| B. | co‐ordination |
| C. | control |
| D. | all of these |
| Answer» D. all of these | |
| 81. |
Wiseman‐Peacock hypothesis supports in a much stronger manner the possibility of: |
| A. | an upward trend in public expenditure |
| B. | a downward trend in public expenditure |
| C. | a constancy of public expenditure |
| D. | a mixed trend in public expenditure |
| Answer» A. an upward trend in public expenditure | |
| 82. |
A negative externality is |
| A. | conflict relation with a foreign country |
| B. | deficit in external trade |
| C. | hurting effect of a private action on other people |
| D. | rain outdoors. |
| Answer» C. hurting effect of a private action on other people | |
| 83. |
The “Tragedy of the Commons” is |
| A. | discovery of corruption among members of the british parliament. |
| B. | exhaustion of resources that are collectively owned. |
| C. | outrageous crime in a boston public park. |
| D. | play by arthur miller. |
| Answer» B. exhaustion of resources that are collectively owned. | |
| 84. |
Which of the following is a public good? |
| A. | house. |
| B. | traffic sign. |
| C. | both of the above. |
| D. | none of the above |
| Answer» C. both of the above. | |
| 85. |
The provision of public goods requires |
| A. | competition among firms in the market |
| B. | lobbying |
| C. | trade protection |
| D. | none of the above. |
| Answer» D. none of the above. | |
| 86. |
Public goods are those for which |
| A. | external costs exist. |
| B. | individuals who do not pay cannot be excluded from consuming. |
| C. | individuals who do not pay can be excluded from consuming. |
| D. | no external costs exist. |
| Answer» B. individuals who do not pay cannot be excluded from consuming. | |
| 87. |
When consumption of a good is non-rival and non-excludable, the good is a |
| A. | public good. |
| B. | mixed good. |
| C. | private good. |
| D. | service. |
| Answer» A. public good. | |
| 88. |
Of those listed below, the best example of a pure public good is |
| A. | a radio broadcast. |
| B. | a book. |
| C. | a rock concert held in a small auditorium. |
| D. | a state lottery |
| Answer» A. a radio broadcast. | |
| 89. |
Non-rivalry is a feature of |
| A. | public goods. |
| B. | goods but not services. |
| C. | excludable goods. d. all non-excludable goo |
| Answer» A. public goods. | |
| 90. |
Non-excludability is a feature of |
| A. | goods but not services |
| B. | goods with an external cost. |
| C. | public goods d. all non-rival goo |
| Answer» C. public goods d. all non-rival goo | |
| 91. |
Pure private goods are those for which consumption is |
| A. | non-rival and excludable. |
| B. | rival and excludable. |
| C. | rival and non-excludable. |
| D. | non-rival and non-excludable. |
| Answer» B. rival and excludable. | |
| 92. |
When consumption is rival and excludable, the product is a |
| A. | private good. |
| B. | service not a good. |
| C. | mixed good. d. public goo |
| Answer» A. private good. | |
| 93. |
A good or service or a resource is non-excludable if |
| A. | it is possible to prevent someone from enjoying the benefits of it. |
| B. | its use by one person decreases the quantity available for someone else. |
| C. | it is not possible to prevent someone from benefiting from it. |
| D. | its use by one person does not decrease the quantity available for someone else |
| Answer» C. it is not possible to prevent someone from benefiting from it. | |
| 94. |
An uncrowded toll road is ________ because it is ________. |
| A. | not a pure public good; non-rival but excludable |
| B. | not a pure public good; both rival and excludable |
| C. | a pure public good; both non-rival and non-excludable |
| D. | not a pure public good; non-excludable but rival |
| Answer» A. not a pure public good; non-rival but excludable | |
| 95. |
A good or service or a resource is excludable if |
| A. | it is possible to prevent someone from enjoying the benefits of it. |
| B. | its use by one person decreases the quantity available for someone else. |
| C. | it is not possible to prevent someone from enjoying the benefits of it. |
| D. | its use by one person does not decrease the quantity available for someone else. |
| Answer» A. it is possible to prevent someone from enjoying the benefits of it. | |
| 96. |
A good or service or a resource is non-rival if |
| A. | it is not possible to prevent someone from enjoying the benefits of it. |
| B. | it is possible to prevent someone from enjoying the benefits of it. |
| C. | its use by one person decreases the quantity available for someone else. |
| D. | its use by one person does not decrease the quantity available for someone else. |
| Answer» A. it is not possible to prevent someone from enjoying the benefits of it. | |
| 97. |
If the consumption of Good A by one person does not decrease the consumption of Good A by another person, then the good is said to |
| A. | non-excludable. |
| B. | excludable. |
| C. | non-rival. |
| D. | rival. |
| Answer» C. non-rival. | |
| 98. |
The nature of federalism was changed forever by |
| A. | missouri v. department of interior |
| B. | gibbons v. ogden. |
| C. | the civil war |
| D. | chief justice rutledge. |
| Answer» C. the civil war | |
| 99. |
Cooperative federalism is characterized by |
| A. | increasing power of local governments. |
| B. | a stronger, more influential national government. |
| C. | a shift in power from the national to state governments. |
| D. | stronger state governments. |
| Answer» B. a stronger, more influential national government. | |
| 100. |
Peacock and Wiseman Hypothesis on public expenditure consists of three concepts which are: |
| A. | subscription effect, tax effect, expenditure effect |
| B. | tax effect, expenditure effect, consumption effect |
| C. | displacement effect, concentration effect, inspection effect |
| D. | consumption effect, labour effect, income effect |
| Answer» C. displacement effect, concentration effect, inspection effect | |
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