McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Master of Arts in Economics (MA Economics) .
| 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 | |
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