Deck 6: Public Finance and Government Budgeting

Question 1

Which of the following occurs when all taxes and other revenues exceed government expenditures for a year?

A)public debt
B)budget surplus
C)balanced budget
D)budget deficit

Answer 1

budget surplus

Question 2

Public goods have two criteria, one of which is non-excludability. What does that mean?

A)it is not possible to exclude individuals from consumption.
B)it is not possible to produce them without externalities
C)consumption by one does not affect consumption of others
D)a and c.

Answer 2

a and c.

Question 3

The role of the Finance Commission in Central-State fiscal relations has been undermined by

A)the state governments
B)the zonal councils
C)the planning commission
D)the election commission

Answer 3

the planning commission

Question 4

The term 'Performance Budget' was coined by

A)administrative reforms commission of india
B)second hoover commission of usa
C)estimates committee of india
D)first hoover commission of usa

Question 5

If the public debt can be financed without adding to inflation or causing interest rates to rise, it is said to be:

A)only a burden on future generations.
B)in primary balance
C)sustainable
D)following the golden rule of the public finances.

Question 6

Progressive Tax System is that system in which what happens in the rate of tax if there is an increase in income?

A)destruction
B)becomes equal
C)growth
D)becomes unequal

Question 7

Who deals with income and expenditure of public authorities?

A)public finance
B)private finance
C)local govt
D)none of these

Question 8

Unfunded debts are those debts which are paid back within …………

A)two year
B)one year
C)three year
D)six months

Question 9

Which one of the following is not a feature of private finance:

A)balancing of income and expenditure
B)secrecy
C)saving some part of income
D)publicity

Question 10

Government budget is balanced when

A)govt. expenditure outstrips tax receipts
B)govt. tax receipts outstrips expenditure
C)govt. expenditure equals tax revenues
D)none of the above

Question 11

The government can collect funds from

A)taxes
B)fees
C)prices of public goods
D)all the three

Question 12

Progressive taxes:

A)increase government revenue
B)bring equality in distribution of incomes
C)act as penalty for rich people
D)both a and b

Question 13

The tax levied on the interstate trade of goods is

A)sales tax
B)excise tax
C)service tax
D)central sales tax

Question 14

Which of the following taxes is/are withdrawn or abolished?

A)interest tax
B)estate duty
C)gift tax
D)all the above

Question 15

………………...is that process in which taxpayer tries to shift burden of tax on others.

A)impact of tax
B)shifting of tax
C)incidence of tax
D)elasticity of tax

Question 16

Shifting of tax depends on ..............of goods.

A)elasticity
B)quality
C)quantity
D)durability

Question 17

All type of income received to government is called .............. income.

A)private
B)public
C)company
D)partnership

Question 18

Lump sum taxes

A)create no excess burden.
B)are not as widely used as other forms of taxation.
C)generally lack a sense of equity.
D)all of the above