1. According to Peackock Wiseman hypothesis, A discontinuity in the growth pattern which
produces expenditure peak during social disturbances is referred to as:
Correct : A. displacement effect
2. The theory of fiscal policy derives from
Correct : A. principle of sound finance
3. Fiscal Federalism refers to
Correct : C. division of economic functions and resources among different layers of government
4. Marginal cost of providing the public goods to additional consumers is:
Correct : A. 0
5. Mixed goods are those goods having benefits which are:
Correct : C. both a & b
6. Escheat is an example of
Correct : D. none of these
7. Gift tax was introduced in the year
Correct : A. 1958
8. _________ is a broad based and a single comprehensive tax levied on goods and services
consumed in an economy
Correct : C. gst
9. In India GST was introduced in the year
Correct : B. 2017
10. ______________________ is the first country to implement GST
Correct : D. france
11. In which year GST was first introduced
Correct : C. 1954
12. The movement from older level of expenditure and taxation to a new and higher level is called
Correct : C. displacement effect
13. The diffusion theory was associated with the name of
Correct : D. mansfield
14. The existence of economic inequalities among the states is known as
Correct : B. horizontal imbalance
15. When expenditure exceeds total tax revenue, it is called:
Correct : A. surplus budget
16. The Benefit Principle of taxation states that tax should be paid in proportion to:
Correct : C. benefit
17. The most accepted theory of taxation in modern times:
Correct : D. ability theory
18. In which of the following type of economy, the revenue from taxation is likely to be the least?
Correct : D. socialist economy
19. The horizontal fiscal imbalance that arises in a fiscal federation is also called:
Correct : A. problem of equalisation
20. Tax revenue sharing between the federal and sub-national governments is aimed at correcting
which of the following type of imbalances?
Correct : A. vertical imbalances
21. In a free market economy, self-interested individuals operate through a system of mutual
interdependence to promote the general benefit of society at large. Adam Smith referred this as:
Correct : A. invisible hand
22. Expenditure incurred by the Government on building durable assets, like highways, multipurpose
dams, irrigation projects are in the nature of
Correct : A. capital expenditure
23. Which of the following describes the situation where revenues and expenditures are equal during
a given period?
Correct : C. balanced budget
24. During the process of economic development, the share of public expenditure to Gross Domestic
Product tends to expand. This is called:
Correct : A. wagner’s law
25. The principle of public expenditure that requires that Government should avoid shortfall of
revenue in comparison with its expenditure is termed as
Correct : B. canon of surplus
26. The ratio of change in the national income in relation to the change in government spending that
causes it is referred to as:
Correct : A. fiscal multiplier
27. Which of the following occurs when all taxes and other revenues exceed government
expenditures for a year?
Correct : B. budget surplus
28. Public goods have two criteria, one of which is non-excludability. What does that mean?
Correct : D. a and c.
29. The role of the Finance Commission in Central-State fiscal relations has been undermined by
Correct : C. the planning commission
30. The term ‘Performance Budget’ was coined by
Correct : D. first hoover commission of usa
31. If the public debt can be financed without adding to inflation or causing interest rates to rise, it is
said to be:
Correct : C. sustainable
32. Progressive Tax System is that system in which what happens in the rate of tax if there is an
increase in income?
Correct : C. growth
33. Statutory incidence of a tax deals with
Correct : C. the person(s) legally responsible for paying the tax.
34. Who deals with income and expenditure of public authorities?
Correct : A. public finance
35. Unfunded debts are those debts which are paid back within …………
Correct : B. one year
36. Which one of the following is not a feature of private finance:
Correct : D. publicity
37. Government budget is balanced when
Correct : C. govt. expenditure equals tax revenues
38. The government can collect funds from
Correct : D. all the three
39. Progressive taxes:
Correct : D. both a and b
40. The most important source of revenue to the states is
Correct : D. none of the above
41. The tax levied on the interstate trade of goods is
Correct : D. central sales tax
42. Which of the following taxes is/are withdrawn or abolished?
Correct : D. all the above
43. ………………...is that process in which taxpayer tries to shift burden of tax on others.
Correct : B. shifting of tax
44. Shifting of tax depends on ..............of goods.
Correct : A. elasticity
45. The tax levied by the union government on income of individuals is known as
Correct : A. personal income tax
46. The tax on net income of companies is
Correct : D. corporation tax
47. All type of income received to government is called .............. income.
Correct : B. public
48. The difference between total expenditure and total receipts is
Correct : D. revenue deficit
49. Lump sum taxes
Correct : D. all of the above
50. Externalities can be positive because
Correct : B. utility can be impacted positively as well as negatively.
51. The economic incidence of a unit tax is
Correct : D. independent of the statutory incidence for the tax.
52. A public good is
Correct : B. non-rival in consumption.
53. It is difficult to evade:
Correct : A. direct tax
54. The main source of revenue of federal government is:
Correct : D. sales tax
55. Who establishes the Finance Commission in India?
Correct : A. president
56. How many Finance Commissions have been constituted so far?
Correct : C. 14
57. Which of the following statements is not correct?
Correct : B. chairman of the first finance commission was mr. santhanam
58. Recommendations of first Finance Commission covered which of the following periods?
Correct : B. 952-57
59. Who was the Chairman of the Seventh Finance Commission of India?
Correct : A. j. m. shelat
60. Horizontal equity incorporates the notion that
Correct : B. those earnings equal incomes should pay same in taxes
61. Interim budget is also known as....
Correct : C. both a and b
62. What is the biggest source of Income for the Central Government in the Union Budget 2020-21?
Correct : D. borrowings and other liabilities
63. Which of the following is not the rate of tax slab in the Union Budget 2020-21?