Deck 2: Fiscal Policy and Taxation

Question 1

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 1

gross primary deficit

Question 2

Interest payment is an item of

A)revenue expenditure
B)capital expenditure
C)plan expenditure
D)none of these

Answer 2

revenue expenditure

Question 3

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 3

total turnover of the company

Question 4

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.

Question 5

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

Question 6

Which of the following is not a direct tax?

A)personal income tax
B)service tax
C)wealth tax
D)corporate income tax

Question 7

Transfer Payments include

A)old age pension
B)subsidies
C)wealth tax
D)corporate income tax

Question 8

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.

Question 9

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

Question 10

Special assessment is also known as

A)tax revenue
B)battement levy
C)vat
D)none of the above

Question 11

Impact of a tax refers to

A)final money burden
B)immediate money burden
C)indirect real burden
D)none of the above

Question 12

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

Question 13

Which of the following is not a direct tax?

A)income tax
B)wealth tax
C)gift tax
D)service tax

Question 14

Which of the following is administrative non-tax revenue?

A)fees
B)gifts
C)grants
D)profits of govt. enterprises

Question 15

Which of the following is not an indirect tax?

A)sales tax
B)custom duty
C)excise duty
D)gift tax

Question 16

Generally, the nature of indirect tax is ……………

A)progressive
B)regressive
C)proportional
D)none of the above

Question 17

Direct tax are………….. in nature.

A)progressive
B)equitable
C)regressive
D)none of the above

Question 18

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

Question 19

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

Question 20

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

Question 21

Pick out the item which is not a part of tax revenue.

A)interest
B)corporate tax
C)excise
D)customs

Question 22

The term fiscal federalism was introduced by

A)dalton
B)seligman c
C)musgrave
D)none of the above

Question 23

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

Question 24

An empirical law to the effect of growing public expenditure was propounded by

A)wagner
B)peacock
C)wiseman
D)none of these

Question 25

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