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.
| 51. |
The government can collect funds from |
| A. | taxes |
| B. | fees |
| C. | prices of public goods |
| D. | all the three |
| Answer» E. | |
| 52. |
Which one of the following is not a feature of private finance: |
| A. | balancing of income and expenditure |
| B. | secrecy |
| C. | saving some part of income |
| D. | publicity |
| Answer» E. | |
| 53. |
Government budget is balanced when |
| A. | govt. expenditure outstrips tax receipts |
| B. | govt. tax receipts outstrips expenditure |
| C. | govt. expenditure equals tax revenues |
| D. | none of the above |
| Answer» D. none of the above | |
| 54. |
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 | |
| 55. |
Statutory incidence of a tax deals with |
| A. | the amount of revenue left over after taxes. |
| B. | the amount of taxes paid after accounting for inflation. |
| C. | the person(s) legally responsible for paying the tax. |
| D. | the amount of tax revenue generated after a tax is imposed. |
| Answer» D. the amount of tax revenue generated after a tax is imposed. | |
| 56. |
Progressive Tax System is that system in which what happens in the rate of tax if there is an increase in income? |
| A. | destruction |
| B. | becomes equal |
| C. | growth |
| D. | becomes unequal |
| Answer» D. becomes unequal | |
| 57. |
If the public debt can be financed without adding to inflation or causing interest rates to rise, it is said 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. | |
| 58. |
Who deals with income and expenditure of public authorities? |
| A. | public finance |
| B. | private finance |
| C. | local govt |
| D. | none of these |
| Answer» B. private finance | |
| 59. |
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. | |
| 60. |
Public goods have two criteria, one of which is non-excludability. What does that mean? |
| A. | it is not possible to exclude individuals from consumption. |
| B. | it is not possible to produce them without externalities |
| C. | consumption by one does not affect consumption of others |
| D. | a and c. |
| Answer» E. | |
| 61. |
The role of the Finance Commission in Central-State fiscal relations has been undermined by |
| A. | the state governments |
| B. | the zonal councils |
| C. | the planning commission |
| D. | the election commission |
| Answer» D. the election commission | |
| 62. |
Which of the following occurs when all taxes and other revenues exceed government expenditures for a year? |
| A. | public debt |
| B. | budget surplus |
| C. | balanced budget |
| D. | budget deficit |
| Answer» C. balanced budget | |
| 63. |
The ratio of change in the national income in relation to the change in government spending that causes it is referred to as: |
| A. | fiscal multiplier |
| B. | spending ratio |
| C. | expenditure ratio |
| D. | cost multiplier |
| Answer» B. spending ratio | |
| 64. |
The principle of public expenditure that requires that Government should avoid shortfall of revenue 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 | |
| 65. |
During the process of economic development, the share of public expenditure to Gross Domestic Product 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 | |
| 66. |
Which of the following describes the situation where revenues and expenditures are equal during a given period? |
| A. | public debt |
| B. | budget surplus |
| C. | balanced budget |
| D. | budget deficit |
| Answer» D. budget deficit | |
| 67. |
Expenditure incurred by the Government on building durable assets, like highways, multipurpose dams, irrigation projects are in the nature of |
| A. | capital expenditure |
| B. | revenue expenditure |
| C. | transfer expenditure |
| D. | unproductive expenditure |
| Answer» B. revenue expenditure | |
| 68. |
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: |
| A. | invisible hand |
| B. | direct intervention |
| C. | collective spirit |
| D. | private spirit |
| Answer» B. direct intervention | |
| 69. |
Tax revenue sharing between the federal and sub-national governments is aimed at correcting which of the following type of imbalances? |
| A. | vertical imbalances |
| B. | horizontal imbalances |
| C. | diagonal imbalances |
| D. | criss-cross imbalances |
| Answer» B. horizontal imbalances | |
| 70. |
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 |
| Answer» B. problem of efficiency | |
| 71. |
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 |
| Answer» E. | |
| 72. |
The most accepted theory of taxation in modern times: |
| A. | benefit theory |
| B. | cost of service |
| C. | financial theory |
| D. | ability theory |
| Answer» E. | |
| 73. |
The Benefit Principle of taxation states that tax should be paid in proportion to: |
| A. | income |
| B. | expenditure |
| C. | benefit |
| D. | utility |
| Answer» D. utility | |
| 74. |
The existence of economic inequalities among the states is known as |
| A. | vertical imbalance |
| B. | horizontal imbalance |
| C. | parallel imbalance |
| D. | none of these |
| Answer» C. parallel imbalance | |
| 75. |
The diffusion theory was associated with the name of |
| A. | dalton |
| B. | keynes |
| C. | r a musgrave |
| D. | mansfield |
| Answer» E. | |
| 76. |
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 |
| Answer» D. none of these | |
| 77. |
In which year GST was first introduced |
| A. | 1952 |
| B. | 1953 |
| C. | 1954 |
| D. | 1955 |
| Answer» D. 1955 | |
| 78. |
______________________ is the first country to implement GST |
| A. | usa |
| B. | u k |
| C. | canada |
| D. | france |
| Answer» E. | |
| 79. |
In India GST was introduced in the year |
| A. | 2016 |
| B. | 2017 |
| C. | 2018 |
| D. | 2019 |
| Answer» C. 2018 | |
| 80. |
_________ is a broad based and a single comprehensive tax levied on goods and services consumed in an economy |
| A. | vat |
| B. | cenvat |
| C. | gst |
| D. | none of these |
| Answer» D. none of these | |
| 81. |
Escheat is an example of |
| A. | direct tax |
| B. | indirect tax |
| C. | both a & b |
| D. | none of these |
| Answer» E. | |
| 82. |
Mixed goods are those goods having benefits which are: |
| A. | rival |
| B. | non-rival |
| C. | both a & b |
| D. | none of these |
| Answer» D. none of these | |
| 83. |
Gift tax was introduced in the year |
| A. | 1958 |
| B. | 1959 |
| C. | 1960 |
| D. | 1961 |
| Answer» B. 1959 | |
| 84. |
Marginal cost of providing the public goods to additional consumers is: |
| A. | 0 |
| B. | 1 |
| C. | 2 |
| D. | 3 |
| Answer» B. 1 | |
| 85. |
Fiscal Federalism refers to |
| A. | sharing of political power between centre and states |
| B. | organising and implementing economic plans |
| C. | division of economic functions and resources among different layers of government |
| D. | none of these |
| Answer» D. none of these | |
| 86. |
The theory of fiscal policy derives from |
| A. | principle of sound finance |
| B. | n.i. analysis |
| C. | welfare economics |
| D. | none of these |
| Answer» B. n.i. analysis | |
| 87. |
According to Peackock Wiseman hypothesis, A discontinuity in the growth pattern which produces 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 | |
| 88. |
Peacock and Wiseman Hypothesis on public expenditure consists of three concepts which are: |
| A. | subscription effect, tax effect, expenditure effect |
| B. | tax effect, expenditure effect, consumption effect |
| C. | displacement effect, concentration effect, inspection effect |
| D. | consumption effect, labour effect, income effect |
| Answer» D. consumption effect, labour effect, income effect | |
| 89. |
Cooperative federalism is characterized by |
| A. | increasing power of local governments. |
| B. | a stronger, more influential national government. |
| C. | a shift in power from the national to state governments. |
| D. | stronger state governments. |
| Answer» C. a shift in power from the national to state governments. | |
| 90. |
The nature of federalism was changed forever by |
| A. | missouri v. department of interior |
| B. | gibbons v. ogden. |
| C. | the civil war |
| D. | chief justice rutledge. |
| Answer» D. chief justice rutledge. | |
| 91. |
If the consumption of Good A by one person does not decrease the consumption of Good A by another person, then the good is said to |
| A. | non-excludable. |
| B. | excludable. |
| C. | non-rival. |
| D. | rival. |
| Answer» D. rival. | |
| 92. |
A good or service or a resource is non-rival if |
| A. | it is not possible to prevent someone from enjoying the benefits of it. |
| B. | it is possible to prevent someone from enjoying the benefits of it. |
| C. | its use by one person decreases the quantity available for someone else. |
| D. | its use by one person does not decrease the quantity available for someone else. |
| Answer» B. it is possible to prevent someone from enjoying the benefits of it. | |
| 93. |
An uncrowded toll road is ________ because it is ________. |
| A. | not a pure public good; non-rival but excludable |
| B. | not a pure public good; both rival and excludable |
| C. | a pure public good; both non-rival and non-excludable |
| D. | not a pure public good; non-excludable but rival |
| Answer» B. not a pure public good; both rival and excludable | |
| 94. |
A good or service or a resource is excludable if |
| A. | it is possible to prevent someone from enjoying the benefits of it. |
| B. | its use by one person decreases the quantity available for someone else. |
| C. | it is not possible to prevent someone from enjoying the benefits of it. |
| D. | its use by one person does not decrease the quantity available for someone else. |
| Answer» B. its use by one person decreases the quantity available for someone else. | |
| 95. |
A good or service or a resource is non-excludable if |
| A. | it is possible to prevent someone from enjoying the benefits of it. |
| B. | its use by one person decreases the quantity available for someone else. |
| C. | it is not possible to prevent someone from benefiting from it. |
| D. | its use by one person does not decrease the quantity available for someone else |
| Answer» D. its use by one person does not decrease the quantity available for someone else | |
| 96. |
When consumption is rival and excludable, the product is a |
| A. | private good. |
| B. | service not a good. |
| C. | mixed good. |
| D. | public good |
| Answer» B. service not a good. | |
| 97. |
Pure private goods are those for which consumption is |
| A. | non-rival and excludable. |
| B. | rival and excludable. |
| C. | rival and non-excludable. |
| D. | non-rival and non-excludable. |
| Answer» E. | |
| 98. |
Non-excludability is a feature of |
| A. | goods but not services |
| B. | goods with an external cost. |
| C. | public goods |
| D. | all non-rival good |
| Answer» D. all non-rival good | |
| 99. |
Non-rivalry is a feature of |
| A. | public goods. |
| B. | goods but not services. |
| C. | excludable goods. |
| D. | all non-excludable good |
| Answer» B. goods but not services. | |
| 100. |
Of those listed below, the best example of a pure public good is |
| A. | a radio broadcast. |
| B. | a book. |
| C. | a rock concert held in a small auditorium. |
| D. | a state lottery |
| Answer» B. a book. | |