Deck 1: Taxation and Budgeting: Concepts and Practices

Question 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 1

the rate of rises with a rise in income

Question 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 2

buyers more than sellers

Question 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 3

proportional

Question 4

Repayment of public debt refers to

A)discharging duties
B)redemption of public debt
C)repayment
D)recovery

Question 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

Question 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

Question 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

Question 8

Expenditure tax was introduced in India as per the recommendation of ………………

A)nehru
B)kaldor
C)k. n. raj
D)john mathai

Question 9

Wealth tax was abolished in

A)2011
B)2012
C)2014
D)2015

Question 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

Question 11

Canons of budgeting was given by

A)adam smith
B)h d smith
C)marshall
D)dalton

Question 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

Question 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

Question 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

Question 15

Which committee recommended tax on agriculture holding in India?

A)tandor committee
B)raj committee
C)kelkar committee
D)dantwala committee

Question 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

Question 17

The principle of maximum social advantage is concerned with

A)taxation
B)expenditure
C)public debt
D)both taxation and public expenditure

Question 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

Question 19

Agriculture income tax is a source of revenue to

A)central government
B)state government
C)local administration
D)central and state government

Question 20

Octrio is levies and collected by

A)centre
B)state government
C)local bodies
D)all of the above

Question 21

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

Question 22

All taxes come under

A)capital receipt
B)revenue receipt
C)public debt
D)public expenditure

Question 23

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

Question 24

The concept of Zero-Based-Budget(ZBB) was given by

A)ra musgrave
B)j. m. keynes
C)peter a pyhr
D)a. h. hancen