Top 150+ Solved Public Finance MCQ Questions Answer
Q. The movement from older level of expenditure and taxation to a new and higher level is called
a. concentration effect
b. inspection effect
c. displacement effect
d. none of these
Q. The diffusion theory was associated with the name of
a. dalton
b. keynes
c. r a musgrave
d. mansfield
Q. The existence of economic inequalities among the states is known as
a. vertical imbalance
b. horizontal imbalance
c. parallel imbalance
d. none of these
Q. When expenditure exceeds total tax revenue, it is called:
a. surplus budget
b. balanced budget
c. deficit budget
d. none of these
Q. The Benefit Principle of taxation states that tax should be paid in proportion to:
a. income
b. expenditure
c. benefit
d. utility
Q. The most accepted theory of taxation in modern times:
a. benefit theory
b. cost of service
c. financial theory
d. ability theory
Q. In which of the following type of economy, the revenue from taxation is likely to be the least?
a. free market economy
b. keynesian economy
c. mixed economy
d. socialist economy
Q. The horizontal fiscal imbalance that arises in a fiscal federation is also called:
a. problem of equalisation
b. problem of efficiency
c. problem of effectiveness
d. problem of economy
Q. Tax revenue sharing between the federal and sub-national governments is aimed at correctingwhich of the following type of imbalances?
a. vertical imbalances
b. horizontal imbalances
c. diagonal imbalances
d. criss-cross imbalances
Q. In a free market economy, self-interested individuals operate through a system of mutualinterdependence to promote the general benefit of society at large. Adam Smith referred this as:
a. invisible hand
b. direct intervention
c. collective spirit
d. private spirit
Q. Expenditure incurred by the Government on building durable assets, like highways, multipurposedams, irrigation projects are in the nature of
a. capital expenditure
b. revenue expenditure
c. transfer expenditure
d. unproductive expenditure
Q. Which of the following describes the situation where revenues and expenditures are equal duringa given period?
a. public debt
b. budget surplus
c. balanced budget
d. budget deficit