Public Finance
1. Who among the following has suggested tax on expenditure?
a. Dalton
b. Kaldor
c. Musgrave
d. Gautam Mathur
Ans: b
2. The receipt of which of the following taxes/duties are not shared with the states?
a. Tax on income except agriculture
b. Corporation tax
c. Surcharge on Income tax
d. Capital gain tax
Ans: a
3. Buoyancy of a tax is defined as:
a. Percentage increase in tax revenue/percentage increase in tax base
b. Increase in tax revenue/percentage increase in tax coverage
c. Increase in tax revenue/increase in tax base
d. Percentage increase in tax revenue/increase in tax coverage
Ans: a
4. The incidence of tax refers to:
a. Who pays the tax
b. Who bears the burden of tax
c. How taxes can be shifted
d. Who transfers the tax burden
Ans: b
5. Ad Valorem tax is levied:
a. According to value added by the government
b. According to value addition to a commodity
c. According to value given by producers
d. According to value added by the Finance ministry
Ans: b
6. The tax levied on gross sales revenue from business transactions is called?
a. Turnover Tax
b. Sales Tax
c. Capital gains Tax
d. Corporation Tax
Ans: a
7. Taxes on professionals can be levied by:
a. State Government only
b. Both state and union government
c. By Panchayat only
d. Union Government Only
Ans: a
8. Excise duty is levied on:
a. Sale of goods
b. Production of goods
c. Imports of goods
d. Export of goods
Ans: b
9. CENVAT is related to which of the following?
a. Sales Tax
b. Excise Duty
c. Custom Duty
d. Service Tax
Ans: b
10. The term ‘Dumping’ refers to:
a. The sale of a sub-standard commodity
b. Sale in a foreign market of a commodity at a price below marginal cost
c. Sale in the foreign market of a commodity just at marginal cost with too much profit
d. Smuggling of goods without paying any customs duty
Ans: b
Government Budgeting
11. Which of the following is a direct tax?
a. Excise Duty
b. Customs Duty
c. Service Tax
d. Wealth Tax
Ans: d
12. Subsidy by government of India is given to:
a. Consumer Unit
b. Productive Unit
c. Banking Unit
d. Government Unit
Ans: b
13. For which fund can the unanticipated expenditure be met without the prior approval of the parliament?
a. Consolidated Fund of India
b. Contingency Fund of India
c. Vote on Account
d. From the Treasury
Ans: b
14. Disinvestment is:
a. Offloading of share of private companies to government
b. Offloading of government shares to private companies
c. Increase in investment
d. Closing down business concerns
Ans: b
15. The Single largest item of expenditure of the Central Government in India in recent years is:
a. Defence
b. Subsidies
c. Interest Payment
d. General services
Ans: c
Economic Policies
16. Social accounting system in India is classified into:
a. Income, product and expenditure
b. Enterprise, household, and government
c. Assets, liabilities, and debt position
d. Public sector, Private Sector, and Joint Sector
Ans: a
17. Which of the following is not viewed as national debt?
a. Life Insurance Policies
b. Long-term Government Bonds
c. National Saving Certificates
d. Provident Fund
Ans: c
18. What situation would result if Government expenditure exceeds the Government revenue on Current Account?
a. Deficit Budgeting
b. Zero-based Budgeting
c. Performance-based budgeting
d. Surplus budgeting
Ans: a
19. Which of the following does not count as development expenditure of government?
a. Expenditure on economic service
b. Expenditure on social service
c. Grant to states
d. Defence expenditure
Ans: d
20. Which among the following is not a direct tax?
a. Income tax
b. Property tax
c. Gift tax
d. Sales tax
Ans: d