McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Arts in Economics (BA Economics) .
| 1. |
When expenditure exceeds total tax revenue, it is called: |
| A. | surplus budget |
| B. | balanced budget |
| C. | deficit budget |
| D. | none of these |
| Answer» C. deficit budget | |
| 2. |
A pure private good is subject to: |
| A. | non exclusion |
| B. | exclusion |
| C. | low satisfaction |
| D. | none of thse |
| Answer» B. exclusion | |
| 3. |
Which of the following is not a fiscal instrument? |
| A. | open market operations |
| B. | public expenditure |
| C. | taxation |
| D. | none of these |
| Answer» A. open market operations | |
| 4. |
An increase in tax rate when tax base expands represents: |
| A. | progressive taxation |
| B. | regressive taxation |
| C. | proportional taxation |
| D. | none of these |
| Answer» A. progressive taxation | |
| 5. |
The main difference between Public and Private Finance is: |
| A. | balance of income‐expenditure |
| B. | coerciveness of fiscal power to raise income: |
| C. | dissaving |
| D. | borrowings |
| Answer» A. balance of income‐expenditure | |
| 6. |
The name of the Chairman of the 11th Finance Commission |
| A. | k.c. pant |
| B. | a.m. kushro |
| C. | r. j. chelliah |
| D. | n.k.p. salve |
| Answer» A. k.c. pant | |
| 7. |
Income tax is based on the principle of: |
| A. | ability to pay |
| B. | willingness to pay |
| C. | benefits received |
| D. | none of these |
| Answer» A. ability to pay | |
| 8. |
The Principle of Maximum Social Advantage is associated with: |
| A. | dalton |
| B. | pigou |
| C. | seligman |
| D. | hicks |
| Answer» A. dalton | |
| 9. |
Which is not the characteristic of a tax? |
| A. | import content |
| B. | compulsory payment |
| C. | non –compulsory payment |
| D. | punishment to tax evader |
| Answer» C. non –compulsory payment | |
| 10. |
Special assessment means: |
| A. | general tax on all people |
| B. | gift tax |
| C. | a tax for specific benefit conferred |
| D. | none of these |
| Answer» C. a tax for specific benefit conferred | |
| 11. |
Classical canons of taxation are propounded by: |
| A. | adam smith |
| B. | bastable |
| C. | dalton |
| D. | keynes |
| Answer» A. adam smith | |
| 12. |
The Kelkar Proposals are concerned with: |
| A. | recommendations for re4forms in the power sector |
| B. | recommendations for tax reforms |
| C. | guidelines for the privatization of public sector undertakings |
| D. | none of the above |
| Answer» B. recommendations for tax reforms | |
| 13. |
Value Added Tax is: |
| A. | direct tax |
| B. | indirect tax |
| C. | progressive tax |
| D. | none of these |
| Answer» B. indirect tax | |
| 14. |
In the case of direct tax, impact and incidence are on: |
| A. | different person |
| B. | same person |
| C. | sellers |
| D. | none of these |
| Answer» B. same person | |
| 15. |
The direct violation of Tax law is called: |
| A. | tax evasion |
| B. | tax avoidance |
| C. | tax rebate |
| D. | none of these |
| Answer» A. tax evasion | |
| 16. |
The final resting place of the burden of tax is called: |
| A. | tax avoidance |
| B. | tax evasion |
| C. | impact |
| D. | incidence |
| Answer» D. incidence | |
| 17. |
Incidence of tax refers to: |
| A. | initial resting place of the burden of tax |
| B. | final resting place of the burden of tax |
| C. | both (a) and (b) |
| D. | none of these |
| Answer» B. final resting place of the burden of tax | |
| 18. |
A tax levied at 5 percent on the first Rs. 10,000 of income, 10 percent on the next Rs 20,000 and 12 percent on the next Rs 30,000 would be: |
| A. | progressive |
| B. | degressive |
| C. | regressive |
| D. | proportional |
| Answer» A. progressive | |
| 19. |
Which of the following taxes is the most likely to be regressive? |
| A. | sales tax on mobile phone |
| B. | excise duties on kerosene |
| C. | import duties on electronic goods |
| D. | entrainment tax |
| Answer» B. excise duties on kerosene | |
| 20. |
Impact of tax refers to: |
| A. | initial resting place of the burden of tax |
| B. | tax evasion |
| C. | the final money burden of tax |
| D. | none of these |
| Answer» A. initial resting place of the burden of tax | |
| 21. |
Fiscal policy is the policy of: |
| A. | rbi |
| B. | nabard |
| C. | government |
| D. | all the above |
| Answer» C. government | |
| 22. |
The principle of judging fiscal measures by the way they work is called: |
| A. | personal finance |
| B. | public finance |
| C. | functional finance |
| D. | local finance |
| Answer» C. functional finance | |
| 23. |
When individuals with unequal tax paying ability should be taxed unequally in order to equalise sacrifice is called: |
| A. | horizontal equity |
| B. | vertical equity |
| C. | tax paying ability |
| D. | none of these |
| Answer» C. tax paying ability | |
| 24. |
The following is an example of direct taxes: |
| A. | sales tax |
| B. | income tax |
| C. | estate duties |
| D. | toll tax |
| Answer» B. income tax | |
| 25. |
If the rate of tax falls with an increase in income, it is called: |
| A. | proportional tax |
| B. | progressive tax |
| C. | regressive tax |
| D. | none of these |
| Answer» C. regressive tax | |
| 26. |
Which is the method of financial adjustment between Centre and States? |
| A. | tax sharing |
| B. | grant‐in‐aid |
| C. | public debt |
| D. | federal finance |
| Answer» A. tax sharing | |
| 27. |
Who suggested an expenditure tax as an alternative to income tax? |
| A. | musgrave |
| B. | galbraith |
| C. | dalton |
| D. | kaldor |
| Answer» D. kaldor | |
| 28. |
Budget is an instrument of: |
| A. | monetary policy |
| B. | fiscal policy |
| C. | trade policy |
| D. | exchange rate policy |
| Answer» B. fiscal policy | |
| 29. |
The concept of functional finance was developed by: |
| A. | j.m. keynes |
| B. | a.p. lerner |
| C. | kaldor |
| D. | pigou |
| Answer» B. a.p. lerner | |
| 30. |
The modern state is: |
| A. | laissez –faire state |
| B. | welfare state |
| C. | aristocratic state |
| D. | police state |
| Answer» B. welfare state | |
| 31. |
According to Musgrave the major functions of public finance is: |
| A. | allocative function |
| B. | distributive function |
| C. | stabilisation function |
| D. | all the above |
| Answer» D. all the above | |
| 32. |
Who is the author of the book “The Theory of Public Finance”? |
| A. | dalton |
| B. | r.a. musgrave |
| C. | a.r. prest |
| D. | harvey rosen |
| Answer» B. r.a. musgrave | |
| 33. |
A criterion by which public goods are distinguished from private goods: |
| A. | exclusion principle |
| B. | externality principle |
| C. | public choice principle |
| D. | none of the above |
| Answer» A. exclusion principle | |
| 34. |
Who was the first to recommend the adoption of an expenditure tax for India? |
| A. | k.n. raj |
| B. | paul krugman |
| C. | raja j. chelliah |
| D. | n. kaldor |
| Answer» D. n. kaldor | |
| 35. |
The controlling authority of Government expenditure is: |
| A. | rbi |
| B. | planning commission |
| C. | ministry of finance |
| D. | finance commission |
| Answer» C. ministry of finance | |
| 36. |
The idea of ‘Democratic Decentralization’ in India was popularized by: |
| A. | a.d. gorwala committee, 1951 |
| B. | b.r. mehta committee, 1957 |
| C. | ashok mehta committee, 1978 |
| D. | none of these |
| Answer» C. ashok mehta committee, 1978 | |
| 37. |
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 | |
| 38. |
The incidence of tax refers to: |
| A. | the level and rate of taxation |
| B. | who ultimately pays the tax |
| C. | the growth of taxation |
| D. | the way in which tax is collected |
| Answer» B. who ultimately pays the tax | |
| 39. |
The theory of fiscal policy derives from |
| A. | principle of sound finance |
| B. | n.i. analysis |
| C. | welfare economics |
| D. | none of these |
| Answer» A. principle of sound finance | |
| 40. |
The most important source of public revenue is |
| A. | fees |
| B. | commercial revenue |
| C. | tax |
| D. | fines & penalties |
| Answer» C. tax | |
| 41. |
Fiscal Federalism refers to |
| A. | sharing of political power between centre and states |
| B. | organising and implementing economic plans |
| C. | division of economic functions and resources among different layers of govt. |
| D. | none of these |
| Answer» C. division of economic functions and resources among different layers of govt. | |
| 42. |
Which one of the following is an optional function of Government? |
| A. | defense |
| B. | old age security |
| C. | law and order |
| D. | none of these |
| Answer» B. old age security | |
| 43. |
Principle of sound finance refers to |
| A. | maximum government spending |
| B. | minimum government spending |
| C. | revenue expenditure balanced at the minimum level |
| D. | balance between tax and spending |
| Answer» C. revenue expenditure balanced at the minimum level | |
| 44. |
Private goods are characterized by |
| A. | application of exclusion principle |
| B. | rivalry in consumption |
| C. | payment of prices |
| D. | all the above |
| Answer» D. all the above | |
| 45. |
Tax refers to 10 |
| A. | compulsory contribution |
| B. | payment by the people to government |
| C. | no direct return for the payment |
| D. | all the above |
| Answer» B. payment by the people to government | |
| 46. |
. Pump priming is |
| A. | injection of purchasing power into the public through government spending |
| B. | withdrawal of purchasing power from the public |
| C. | balancing revenue and expenditure |
| D. | none of the above |
| Answer» A. injection of purchasing power into the public through government spending | |
| 47. |
Merit goods means |
| A. | private goods |
| B. | public goods |
| C. | subsidized private goods |
| D. | none of these |
| Answer» B. public goods | |
| 48. |
The most important aim of fiscal policy in a developing country is |
| A. | economic stability |
| B. | economic development |
| C. | regional balance |
| D. | none of these |
| Answer» B. economic development | |
| 49. |
The income of the government through all its sources is called |
| A. | public expenditure |
| B. | public revenue |
| C. | public finance |
| D. | none of these |
| Answer» B. public revenue | |
| 50. |
Which of the following are indirect taxes? |
| A. | customs duties |
| B. | excise duties |
| C. | sales tax |
| D. | all the above |
| Answer» D. all the above | |
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