Chapter 7: Public Finance Quiz CA Foundation Chapter 7 Public Finance Quiz 1 1 / 25 Which of the following is a union tax? Corporation tax Taxes on agricultural income Capitation taxes Land revenues 2 / 25 Consider the following statements and identify the right ones.i. Wealth tax is collected from productive as well as unproductive assetsii. Estate duty was a type of inheritance tax of large estates i only ii only both none 3 / 25 The tax on net income of companies is Personal income tax Interest tax Wealth tax Corporation tax 4 / 25 The tax levied by the union government on income of individuals is known as Personal income tax Interest tax Wealth tax Corporation tax 5 / 25 Consider the following statements and identify the right ones.i. Central government does not have exclusive power to impose tax which is not mentioned in state or concurrent list.ii. The constitution also provides for transferring certain tax revenues from union list to states. i only ii only both none 6 / 25 Which of the following is not a union tax? Taxes on railway freights and fares Stamp duties on financial documents Tolls A and b only 7 / 25 The difference between revenue expenditure and revenue receipts is Revenue deficit Fiscal deficit Budget deficit Primary deficit 8 / 25 Consider the following statements and identify the right ones.i. The 14th finance commission is headed by C. Rangarajanii. The recommendations of the commission will come into effect from April, 1, 2015 i only ii only both none 9 / 25 The tax levied on the interstate trade of goods is Sales tax Excise tax Service tax Central sales tax 10 / 25 The most important source of revenue to the states is Sales tax Service tax Excise duty None of the above 11 / 25 Which of the following taxes is/are withdrawn or abolished? Interest tax Estate duty Gift tax All the above 12 / 25 A progressive income tax implies that the amount of tax falls with a rise in income the rate of rises with a rise in income both a and b the rate of tax decreases with a rise in income 13 / 25 The difference between fiscal deficit and interest payment during the year is called Fiscal deficit Budget deficit Primary deficit Revenue deficit 14 / 25 The difference between total expenditure and total receipts except loans and other liabilities is called Fiscal deficit Budget deficit Primary deficit Revenue deficit 15 / 25 The difference between total expenditure and total receipts is Fiscal deficit Budget deficit Primary deficit Revenue deficit 16 / 25 The difference between revenue deficit and grants for creation of capital assets is called Fiscal deficit Budget deficit Effective revenue deficit Primary deficit 17 / 25 Tobin tax is tax on taxation in the share market transaction in the money market transaction on the commodity market transaction on the foreign exchange market 18 / 25 Which of the following canon of taxation is given by Adam Smith canon of diversity canon of simplicity canon of economy canon of productivity 19 / 25 Repayment of public debt refers to discharging duties redemption of public debt repayment recovery 20 / 25 If with the increases in income, the percentage of income collected as tax remains constant, tax will be called, regressive progressive proportional neutral 21 / 25 A forward-shifted tax will affect buyers more than sellers sellors more than buyers buyers and sellers equally government revenues negatively 22 / 25 In case of deficit budget, when the deficits are covered through taxes, that budget is called: unbalanced budget surplus budget balanced budget none of these 23 / 25 Expenditure tax was introduced in India as per the recommendation of …………….. nehru kaldor k n raj john mathai 24 / 25 Wealth tax abolished in 2011 2012 2014 2015 25 / 25 According to Wiseman and peacock, public expenditure will increase in a smooth manner reverse manner step-like manner none of these above Your score isThe average score is 44% 0% Restart quiz CA Foundation Chapter 7 Public Finance Quiz 2 1 / 25 Canons of budgeting was given by adam smith h d smith marshall dalton 2 / 25 With a regressive tax, as income increases, tax rate remains the same decrease, the tax rate decreases increases, the tax rate increases increases, the tax rate decreases 3 / 25 Which committee recommended tax on agriculture holding in India tandor committee raj committee kelkar committee dantwala committee 4 / 25 The ability to pay principlt of taxation is logically most consistent with the normative notion of tax neutrality norizontal equity value-added taxation vertical equality 5 / 25 The greater the elasitcity of supply, the greater is: incidence of tax on buyers incidence of tax on sellers impact of tax on sellers impact of tax on buyers 6 / 25 Concept of concentration and displacement effect in public expenditure are attributed to: allen t. peacock and jack wiseman a r prest and i m d little a c pigou and j k mehta kenneth arrow and paul a samuelson 7 / 25 The Coase theoram has problems because generally, bargaining costs are not zero. individuals are not concerned with others. market always exists all of the above 8 / 25 Positive Economics does not depend on market interactions only looks at the best parts of the economy examines how the economy actually works (as opposed to how it should work). is very subjective 9 / 25 Agriculture income tax is a source of revenue to central government state government local administration central and state government 10 / 25 Justice taxation is best ensured by applying the principle of equal absolute sacrifice equal proportional sacrifice equal marginal sacrifice quid pro quo 11 / 25 The principle of maximum social advantage is concerned with taxation expenditure public debt both taxation and public expenditure 12 / 25 Market Failure can occure when monopoly power exists in the market markets are missing consumers can influence price all of the above 13 / 25 The economic incidence of a unit tax genrally borne by the buyers generally borne by the sellers genrally borne by the government independent of the statutory incidence for the tax 14 / 25 The frist fundamental theoram of Welfare Economics requires producers and consumers to be price takers. that there be an efficient market for every commodity that there economy operate at some point on the utility possibility curve all of the above 15 / 25 The slope of the production possibilities curve is the marginal rate of subsititution contract curve marignal rate of transformation offer curve 16 / 25 The marginal rate of subsititution is the slope of the Pareto curve. the slope of the contract curve the slope of the utility possibilities curve the slope of the indifference curve 17 / 25 Market Mechanisms are Unlikely to provide prices nonrival good efficiently supply and demand none of the above 18 / 25 The economic theory of optimal health care provision says that It is socially optimal for free medical treatment to be provided to everyone Everyone should pay their own medical expenses because they will set marginal cost equal to marginal benefits Adverse selection can prevent efficient insurance markets from developing even when everyone buys the same insurance The optimal health care system will ration care: Some people who would benefits from treatment should be denied that treatment 19 / 25 Which source a private company cannot use? a bank loan a bank overdraft selling new shares in stock exchange deficit finance 20 / 25 Movement from an inefficient allocation to an efficient allocation in the edge worth Box will increase the utility of all individuals increase the utility of atleast one individual, but may decrease the utility of another person increase the utility of one individual, but not decrease the utility of another person decrease the utility of all individuals 21 / 25 A public good is a good that the public must pay for nonrival in consumption more costly than a private good paid for by the government 22 / 25 The economic incidence of a unit tax is generally borne by the buyers generally borne by the sellers generally borne by the government independent of the statuatory incidence for the tax 23 / 25 Externalities can be positive because marginal damages do not last over time utility can be impacted positively as well as negatively there is no concept for marginal benefits positive externalities are subsidies 24 / 25 A Pigouvian Subsidy cannot exist with externalities is the samething as a Piagouvian tax is measured in terms of Piagouvian dollars moves production to the socially optimal level of output 25 / 25 Which method can help in obtaining a welfare improvement if externalities exist Pigouvian Taxes Regulations assigning property rights and permitting bargaining all of the above Your score isThe average score is 38% 0% Restart quiz CA Foundation Chapter 7 Public Finance Quiz 3 1 / 25 Marginal Damages must always be considered in social marginal costs must not be considered in social marginal costs must sometimes be considered in social marginal costs have nothing to do with social marginal costs 2 / 25 An ad valorem tax is given as a proportion of the price Latin for "buyer beware" identical to a unit tax computed using the "inverse taxation rule" 3 / 25 Statutory incidence of a tax deals with the amount of revenue left over after taxes the amount of taxes paid after accounting for inflation the person(s) legally responsible for paying the tax. the amonut of revenue generated after a tax is imposed 4 / 25 Social Insurance can be justified on the grounds of adverse selection decision making cost income distribution all of these 5 / 25 A Fully Funded Social Security Plan requires negative generational accounts no taxes since current workers pay for current retires future generations to pay for the benefits of current retires retirees to be paid from investments that have accumulated with interest over their working lives 6 / 25 In a public goods context, it is difficult to measure impact on real income because public goods are generally free to the public they make up a small percentage of total GDP it is hard to measure how people value the public good inflation decreases the value of the goods 7 / 25 According to many thinkers, ability to Pay theory is based on which theory on which theory? Public Universal Individual All of these 8 / 25 In the public finance, the government income has the same place which is gained by …………. in study of economy. distribution consumption production exchange 9 / 25 For goods that are unrelated in consumption, efficiency requires that tax rates be inversely proportional to elasiticities. This is the definition of the benefits received principles the Ramsey Rule the second best principle the inverse elasticity rule 10 / 25 If the proceeds from a pigouvian tax are used to income tax rates, then efficiency in both markets increase; increases reduce; reduces increase; reduces reduce, increases 11 / 25 Lumpsum taxes create no excess burden are not widely used as other forms of taxations generally lack a sense of equity all of the above 12 / 25 The functionn of public finance is called the function of………… federal fiscal monetory finance 13 / 25 Adam Smith wrote about function of state in ……… in his book ‘Wealth of Nations’. 1876 1776 1976 1676 14 / 25 The differnce between total expenditure and total receipts is……….. Fiscal deficit primary deficit budget deficit revenue deficit 15 / 25 Public Finance is related with the income and ……… of Public Government consumption distribution debt expenditure 16 / 25 How the government can meet its expenditure; by taxing people by borrowings from banks and other govt. by printing new money by all the three methods 17 / 25 Which of the following is a union tax? Corporation Tax Taxes on Agricultural income Capitation income Land revenues 18 / 25 How many basic principles are there which guide government in financial operations? Three Four Five Six 19 / 25 Where, there is only taxation is taken then what will be the effect on production due to it? Production will not done Production will continue without any hurdle production will block production will stop completely 20 / 25 Which of the following is not a union tax? Taxes on railway freights and fares stamp duties on financial documents tolls a and b only 21 / 25 The principle of Public Finance is also called the principal of…………. Mximum Social Sacrifice Minimum social benefits Minimum Social Sacrifice Maximum Social benefits 22 / 25 When the Government spends money then there is some increment in….. Utility Demand Supply Saving 23 / 25 The tax levied by the union government on income of individuals is known as Personal Income tax Interest tax Wealth tax Corporation Tax 24 / 25 The tax on net income of companies is personal income tax interest tax wealth tax corporation tax 25 / 25 The tax on net income of companies is Personal Income tax Interest Tax Wealth Tax Corporation Tax Your score isThe average score is 29% 0% Restart quiz CA Foundation Chapter 7 Public Finance Quiz 4 1 / 21 All type of income received to government is called …………. income Private Public Company Partnership 2 / 21 The tax levied on the interstate trade of goods is Sales tax Excise tax Service tax Central sales tax 3 / 21 The most important source of revenue to the states is……….. Sales tax Service tax Excise duty None of the above 4 / 21 Which of the following taxes is/are withdrawn or abolished ? Interest tax Estate tax Gift tax All of the above 5 / 21 Shifting of tax depends on ……… of goods Elasticity Quality Quantity Durability 6 / 21 …………. is that process in which taxpayer tries to shift burden of tax on others. Impact of tax Shifting of tax Incidence of tax Elasticity of tax 7 / 21 The government Collect funds from Taxes Fees Prices of goods All of the above 8 / 21 The difference between revenue deficit and grants for creation of capital assets is called Fiscal Deficit Budget Deficit Primary Deficit Effective Revenue Deficit 9 / 21 Whatever less income a section has, if the ratio of benefit from public expenditure is that much more thwn will it called? Proportional Expenditure Depressive Expenditure Progressive Expenditure All of above 10 / 21 In which expenditure, the benefit also increases with the increase in income? Equal proportional Proportional Progressive Depressive 11 / 21 The expenditure must be so that it increases……….. Production Consumption Distribution Exchange 12 / 21 Government budget is balanced when Govt. expenditure outstrips tax receipt Govt. tax receipt outstrips expenditure Govt. expenditure equal to tax revenues none of above 13 / 21 Government Taxing and spending policies are called: Monetary Policy Fiscal Policy Commercial Policy Finance Policy 14 / 21 These are principle of taxation: Principle of equality Principle of certainty Principle of secrecy both a and b 15 / 21 The word is ………. is used normally for Government or state Public Private Society Welfare 16 / 21 Progressive taxes Increase government revenue Bring equality in distribution of incomes Act as penalty of rich people both a and b 17 / 21 Who propounded principles of taxtation Keynes Marshall Adim Smith Admin Ghazali 18 / 21 Audit of State Government is- A state subject A union subject In the concurrent list None of the above 19 / 21 In the time of emergency from which sources the government take debt? Only Indian Only Imported Indian or imported all 20 / 21 Which operation is considered government borrowing by modern economist? complete incomplete important total 21 / 21 Government finance is called National Finance Public Finance Private Finance All of above Your score isThe average score is 38% 0% Restart quiz
