MCQOPTIONS
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MCQOPTIONS
This section includes 186 Mcqs, each offering curated multiple-choice questions to sharpen your Master of Arts in Economics (M.A. Economics) knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
………………...is that process in which taxpayer tries to shift burden of tax on others. |
| A. | impact of tax |
| B. | shifting of tax |
| C. | incidence of tax |
| D. | elasticity of tax |
| Answer» C. incidence of tax | |
| 2. |
Unfunded debts are those debts which are paid back within ………… |
| A. | two year |
| B. | one year |
| C. | three year |
| D. | six months |
| Answer» C. three year | |
| 3. |
Progressive Tax System is that system in which what happens in the rate of tax if there is anincrease in income? |
| A. | destruction |
| B. | becomes equal |
| C. | growth |
| D. | becomes unequal |
| Answer» D. becomes unequal | |
| 4. |
The term ‘Performance Budget’ was coined by |
| A. | administrative reforms commission of india |
| B. | second hoover commission of usa |
| C. | estimates committee of india |
| D. | first hoover commission of usa |
| Answer» E. | |
| 5. |
If the public debt can be financed without adding to inflation or causing interest rates to rise, it issaid to be: |
| A. | only a burden on future generations. |
| B. | in primary balance |
| C. | sustainable |
| D. | following the golden rule of the public finances. |
| Answer» D. following the golden rule of the public finances. | |
| 6. |
Which of the following occurs when all taxes and other revenues exceed governmentexpenditures for a year? |
| A. | public debt |
| B. | budget surplus |
| C. | balanced budget |
| D. | budget deficit |
| Answer» C. balanced budget | |
| 7. |
The ratio of change in the national income in relation to the change in government spending thatcauses it is referred to as: |
| A. | fiscal multiplier |
| B. | spending ratio |
| C. | expenditure ratio |
| D. | cost multiplier |
| Answer» B. spending ratio | |
| 8. |
The principle of public expenditure that requires that Government should avoid shortfall ofrevenue in comparison with its expenditure is termed as |
| A. | canon of deficit |
| B. | canon of surplus |
| C. | canon of elasticity |
| D. | canon of sanction |
| Answer» C. canon of elasticity | |
| 9. |
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 |
| Answer» D. budget deficit | |
| 10. |
During the process of economic development, the share of public expenditure to Gross DomesticProduct tends to expand. This is called: |
| A. | wagner’s law |
| B. | keynes law |
| C. | adam smith’s theory |
| D. | brettonwoods law |
| Answer» B. keynes law | |
| 11. |
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 |
| Answer» B. revenue expenditure | |
| 12. |
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 |
| Answer» B. horizontal imbalances | |
| 13. |
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 |
| Answer» B. direct intervention | |
| 14. |
_________ is a broad based and a single comprehensive tax levied on goods and servicesconsumed in an economy |
| A. | vat |
| B. | cenvat |
| C. | gst |
| D. | none of these |
| Answer» D. none of these | |
| 15. |
According to Peackock Wiseman hypothesis, A discontinuity in the growth pattern whichproduces expenditure peak during social disturbances is referred to as: |
| A. | displacement effect |
| B. | concentration effect |
| C. | inspection effect |
| D. | substitution effect |
| Answer» B. concentration effect | |
| 16. |
If the consumption of Good A by one person does not decrease the consumption of Good A byanother person, then the good is said to |
| A. | non-excludable. |
| B. | excludable. |
| C. | non-rival. |
| D. | rival. |
| Answer» D. rival. | |
| 17. |
The “Tragedy of the Commons” is |
| A. | discovery of corruption among members of the british parliament. |
| B. | exhaustion of resources that are collectively owned. |
| C. | outrageous crime in a boston public park. |
| D. | play by arthur miller. |
| Answer» C. outrageous crime in a boston public park. | |
| 18. |
Wiseman‐Peacock hypothesis supports in a much stronger manner the possibility of: |
| A. | an upward trend in public expenditure |
| B. | a downward trend in public expenditure |
| C. | a constancy of public expenditure |
| D. | a mixed trend in public expenditure |
| Answer» B. a downward trend in public expenditure | |
| 19. |
A multilevel decentralized fiscal system involving sharing of fiscal responsibilities between central,state and local governments is referred to as: |
| A. | fiscal union |
| B. | fiscal federalism |
| C. | fiscal equalisation |
| D. | fiscal generalism |
| Answer» C. fiscal equalisation | |
| 20. |
The system of assigning the source of revenue to the Central as well as State Governments isgenerally referred to as |
| A. | public finance |
| B. | distributive finance |
| C. | unitary finance |
| D. | federal finance |
| Answer» C. unitary finance | |
| 21. |
Wagner’s Law of increasing ............ activities. |
| A. | central |
| B. | state |
| C. | local |
| D. | one of these |
| Answer» C. local | |
| 22. |
The theory of fiscal federalism assumes – |
| A. | a federal system of government can be efficient and effective in solving problems. |
| B. | a federal government will be able to bring about economic stability allocation of resources. |
| C. | since states and localities are not equal in their income, federalism is helpful. |
| D. | all of the above |
| Answer» E. | |
| 23. |
Direct tax are………….. in nature. |
| A. | progressive |
| B. | equitable |
| C. | regressive |
| D. | none of the above |
| Answer» B. equitable | |
| 24. |
Generally, the nature of indirect tax is …………… |
| A. | progressive |
| B. | regressive |
| C. | proportional |
| D. | none of the above |
| Answer» C. proportional | |
| 25. |
The following is a characteristic of indirect tax – |
| A. | the impact and incidence are not on the same person. |
| B. | it is levied on income. |
| C. | taxes are progressive in nature. |
| D. | all of the above |
| Answer» B. it is levied on income. | |
| 26. |
The objective of taxation by the Government are – |
| A. | raising revenue for the state |
| B. | to maintain economic stability |
| C. | to remove disparities in the distribution of income |
| D. | all of the above |
| Answer» E. | |
| 27. |
Expenditure tax was introduced in India as per the recommendation of ……………… |
| A. | nehru |
| B. | kaldor |
| C. | k n raj |
| D. | john mathai |
| Answer» C. k n raj | |
| 28. |
If with the increase in income, the percentage of income collected as tax remains constant, tax will becalled |
| A. | regressive |
| B. | progressive |
| C. | proportional |
| D. | neutral |
| Answer» D. neutral | |
| 29. |
What is the biggest source of Income for the Central Government in the Union Budget 2020-21? |
| A. | goods and services tax |
| B. | corporation tax |
| C. | income tax |
| D. | borrowings and other liabilities |
| Answer» E. | |
| 30. |
Interim budget is also known as.... |
| A. | mini budget |
| B. | vote on account |
| C. | both a and b |
| D. | none of these |
| Answer» D. none of these | |
| 31. |
Horizontal equity incorporates the notion that |
| A. | those earnings higher incomes should pay more in taxes |
| B. | those earnings equal incomes should pay same in taxes |
| C. | taxes paid should be unassociated with income levels |
| D. | there should be no excess burden created by a tax |
| Answer» C. taxes paid should be unassociated with income levels | |
| 32. |
Which of the following is not the rate of tax slab in the Union Budget 2020-21? |
| A. | 10% |
| B. | 15% |
| C. | 25% |
| D. | 40% |
| Answer» E. | |
| 33. |
Who was the Chairman of the Seventh Finance Commission of India? |
| A. | j. m. shelat |
| B. | n. k. singh |
| C. | n. k. singh |
| D. | n. k. singh |
| Answer» B. n. k. singh | |
| 34. |
Recommendations of first Finance Commission covered which of the following periods? |
| A. | 1951-56 |
| B. | 952-57 |
| C. | 1953-58 |
| D. | 1954-59 |
| Answer» C. 1953-58 | |
| 35. |
How many Finance Commissions have been constituted so far? |
| A. | 12 |
| B. | 13 |
| C. | 14 |
| D. | 15 |
| Answer» D. 15 | |
| 36. |
The main source of revenue of federal government is: |
| A. | property taxes |
| B. | token taxes |
| C. | customs duties |
| D. | sales tax |
| Answer» E. | |
| 37. |
It is difficult to evade: |
| A. | direct tax |
| B. | indirect |
| C. | proportional |
| D. | progressive tax |
| Answer» B. indirect | |
| 38. |
Who establishes the Finance Commission in India? |
| A. | president |
| B. | finance minister |
| C. | parliament |
| D. | governor of reserve bank of india |
| Answer» B. finance minister | |
| 39. |
The economic incidence of a unit tax is |
| A. | generally borne by the buyers. |
| B. | generally borne by sellers. |
| C. | generally borne by the government. |
| D. | independent of the statutory incidence for the tax. |
| Answer» E. | |
| 40. |
Lump sum taxes |
| A. | create no excess burden. |
| B. | are not as widely used as other forms of taxation. |
| C. | generally lack a sense of equity. |
| D. | all of the above |
| Answer» E. | |
| 41. |
The difference between total expenditure and total receipts is |
| A. | fiscal deficit |
| B. | budget deficit |
| C. | primary deficit |
| D. | revenue deficit |
| Answer» E. | |
| 42. |
All type of income received to government is called .............. income. |
| A. | private |
| B. | public |
| C. | company |
| D. | partnership |
| Answer» C. company | |
| 43. |
The tax on net income of companies is |
| A. | personal income tax |
| B. | interest tax |
| C. | wealth tax |
| D. | corporation tax |
| Answer» E. | |
| 44. |
The tax levied by the union government on income of individuals is known as |
| A. | personal income tax |
| B. | interest tax |
| C. | wealth tax |
| D. | corporation tax |
| Answer» B. interest tax | |
| 45. |
Shifting of tax depends on ..............of goods. |
| A. | elasticity |
| B. | quality |
| C. | quantity |
| D. | durability |
| Answer» B. quality | |
| 46. |
………………...is that process in which taxpayer tries to shift burden of tax on others. |
| A. | impact of tax |
| B. | shifting of tax |
| C. | incidence of tax |
| D. | elasticity of tax |
| Answer» C. incidence of tax | |
| 47. |
Which of the following taxes is/are withdrawn or abolished? |
| A. | interest tax |
| B. | estate duty |
| C. | gift tax |
| D. | all the above |
| Answer» E. | |
| 48. |
The tax levied on the interstate trade of goods is |
| A. | sales tax |
| B. | excise tax |
| C. | service tax |
| D. | central sales tax |
| Answer» E. | |
| 49. |
The most important source of revenue to the states is |
| A. | sales tax |
| B. | service tax |
| C. | excise duty |
| D. | none of the above |
| Answer» E. | |
| 50. |
Progressive taxes: |
| A. | increase government revenue |
| B. | bring equality in distribution of incomes |
| C. | act as penalty for rich people |
| D. | both a and b |
| Answer» E. | |