Question 1

The system of assigning the source of revenue to the Central as well as State Governments is generally referred to as&#10;A)public finance&#10;B)distributive finance&#10;C)unitary finance&#10;D)federal finance

Accepted Answer

The system of assigning the source of revenue to both Central and State Governments is referred to as federal finance. This system is characteristic of federal countries, where the constitution or legislative framework divides financial powers and responsibilities between different levels of government.

Question 2

The modern state is:&#10;A)laissez-faire state&#10;B)welfare state&#10;C)aristocratic state&#10;D)police state

Accepted Answer

The modern state often refers to a welfare state, which is characterized by the government playing a key role in the protection and promotion of the economic and social well-being of its citizens, through measures such as social insurance, public health, and education.

Question 3

Which one of the following is the most acceptable theory of taxation:&#10;A)benefit theory&#10;B)cost of service theory&#10;C)ability to pay theory&#10;D)none of these

Accepted Answer

The ability to pay theory is the most acceptable theory of taxation, as it is based on the principle that taxes should be levied according to an individual's or entity's ability to pay. This theory emphasizes fairness and equity in the tax system, ensuring that those with higher incomes or wealth contribute more to the public finances than those with less.

Question 4

The Indian income tax is:&#10;A)direct and proportional&#10;B)indirect and proportional&#10;C)indirect and progressive&#10;D)direct and progressive

Accepted Answer

The Indian income tax is a direct tax, meaning it is paid directly by individuals to the government, and it is progressive, meaning the tax rate increases as the taxable amount increases.

Question 5

The main objective of budgeting is:&#10;A)planning&#10;B)co?ordination&#10;C)control&#10;D)all of these

Accepted Answer

Budgeting serves multiple purposes including planning, coordination, and control, making all the options correct.

Question 6

Wiseman?Peacock hypothesis supports in a much stronger manner the possibility of:&#10;A)an upward trend in public expenditure&#10;B)a downward trend in public expenditure&#10;C)a constancy of public expenditure&#10;D)a mixed trend in public expenditure

Accepted Answer

The Wiseman-Peacock hypothesis suggests that public expenditure tends to increase due to specific social and political factors, including the notion that taxpayers become more tolerant of higher taxes following periods of crisis or war, leading to an upward trend in public expenditure.

Question 7

A negative externality is&#10;A)conflict relation with a foreign country&#10;B)deficit in external trade&#10;C)hurting effect of a private action on other people&#10;D)rain outdoors.

Accepted Answer

A negative externality occurs when a private action causes harm or adverse effects on third parties or the environment, which are not reflected in the cost of the action.

Question 8

The &#34;Tragedy of the Commons&#34; is&#10;A)discovery of corruption among members of the british parliament.&#10;B)exhaustion of resources that are collectively owned.&#10;C)outrageous crime in a boston public park.&#10;D)play by arthur miller.

Accepted Answer

The "Tragedy of the Commons" refers to a situation where individual users, acting independently according to their own self-interest, deplete or spoil shared resources, even though it is not in anyone's long-term interest for this to happen.

Question 9

Which of the following is a public good?&#10;A)house.&#10;B)traffic sign.&#10;C)both of the above.&#10;D)none of the above

Accepted Answer

The answer of Which of the following is a public...

Question 10

The provision of public goods requires&#10;A)competition among firms in the market&#10;B)lobbying&#10;C)trade protection&#10;D)none of the above.

Accepted Answer

Public goods are typically provided by the government or through collective action because they are non-excludable and non-rivalrous, meaning they are available to all members of society and one person's use does not diminish another's. This characteristic makes it difficult for private firms to supply these goods competitively, as they cannot easily exclude non-payers, making options A, B, and C incorrect.

Question 11

When consumption of a good is non-rival and non-excludable, the good is a&#10;A)public good.&#10;B)mixed good.&#10;C)private good.&#10;D)service.

Accepted Answer

The answer of When consumption of a good is non-rival...

Question 12

Of those listed below, the best example of a pure public good is&#10;A)a radio broadcast.&#10;B)a book.&#10;C)a rock concert held in a small auditorium.&#10;D)a state lottery

Accepted Answer

The answer of Of those listed below, the best example...

Question 13

Pure private goods are those for which consumption is&#10;A)non-rival and excludable.&#10;B)rival and excludable.&#10;C)rival and non-excludable.&#10;D)non-rival and non-excludable.

Accepted Answer

The answer of Pure private goods are those for which...

Question 14

If the consumption of Good A by one person does not decrease the consumption of Good A by another person, then the good is said to&#10;A)non-excludable.&#10;B)excludable.&#10;C)non-rival.&#10;D)rival.

Accepted Answer

The answer of If the consumption of Good A by...

Question 15

The nature of federalism was changed forever by&#10;A)missouri v. department of interior&#10;B)gibbons v. ogden.&#10;C)the civil war&#10;D)chief justice rutledge.

Accepted Answer

The answer of The nature of federalism was changed forever...

Question 16

Peacock and Wiseman Hypothesis on public expenditure consists of three concepts which are:&#10;A)subscription effect, tax effect, expenditure effect&#10;B)tax effect, expenditure effect, consumption effect&#10;C)displacement effect, concentration effect, inspection effect&#10;D)consumption effect, labour effect, income effect

Accepted Answer

The answer of Peacock and Wiseman Hypothesis on public expenditure...

Deck 4: Public Finance and Fiscal Policy