Public Finance MCQs | Multiple Choice Questions and Answers | For B.Com BBA and MBA

Public Finance MCQs
Multiple Choice Questions and Answers
For B.Com/BBA/MBA

Multiple Choice Questions and Answers (MCQs)

1. Who is the Chairman of the Thirteenth Finance Commission of India?

Ans: Dr. Vijay L Kelkar,

2. Who is the Chairman of 14th finance commission?

Ans: Dr. Y. V. Reddy

3. Who is the Chairman of Fifteenth Finance Commission of India?

Ans: Shri N.K. Singh

4. Write the full form of CAGI.

Ans: Comptroller and Auditor General of India

5. Who is the father of public finance?

Richard A. Musgrave

6. Write the full form of GST.

Ans: Goods and Services Tax

7. The principle of maximum social advantage was introduced by______?

Ans: Professor Hugh Dalton

8. What is the prime source of tax revenue of Assam?                    Previously VAT, Now GST

9. ‘Land Revenue’ is a source of revenue of the Union government. (Write Yes or No)                    No

10. Public Finance is a study of income and expenditure of a Government.           True

11. Financial administration focuses on the procedure which ensures the lawful use of private funds.     False

12. Taxation is the major source of public revenue.          True

13. Public expenditure is the expenditure incurred by public authorities.                               True

14. In zero-base budgeting, every year is taken as a new year. (Write True or False)

Ans:  True

15. Public Expenditure stability is the basic condition for economic stability.

16. Zero-base budgeting technique was first used in America in the year 1969 (Texas).

17. Taxes are paid by an individual though they may be levied upon individuals, property or commodities.

18. A. C. Pigou developed the theory of ‘Ability to Pay’.

19. Public finance deals with income, expenditure and borrowings of the government institutions.

20. The finance ministry possesses the expert knowledge in finance matters.

21. Every tax is an additional burden on the tax-payer (people).

22. Public expenditure is more important than private expenditure.

23. Public expenditure is more important than private expenditure. (Fill in the blank)

24. Write the full form of VAT.

Ans: Value Added Tax

25. Which of the following is not non-tax revenue of the Government?

a)    Receipts from administrative services

b)   Revenue from Public Service Commission

c)    Grants-in-aid and Contributions

d)   Short-term loan

26. Public receipts are divided into

a)    Public receipts and public revenues

b)   Tax and non-tax receipts

c)    Revenue and non-revenue receipts

d)   Revenue and capital receipts

27. Which of the following is not a source of revenue of the union government?

a)    Income tax

b)   Corporation tax

c)    Land revenue

d)   Custom duty

28. Which of the following is not a source of revenue of Central Government?

a)    Income Tax.

b)   Corporation Tax.

c)    Land Revenue.

d)   Import Duty.

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Also Read:

1. Public Finance Notes

2. Public Finance Question Papers (Dibrugarh University)

3. Public Finance Solved Question Papers (Dibrugarh University)

4. Public Finance Important Questions for Upcoming Exam

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29. Expenditure of the Union government is classified as:

a)    Revenue expenditure

b)   Capital expenditure

c)    Non-plan expenditure

d)   All of the above

Short Answer Type Questions

1. What is public finance?

Ans: Public finance is a study of income and expenditure or receipt and payment of government. It deals the income raised through revenue and expenditure spend on the activities of the community and the terms ‘finance’ is money resource i.e. coins.

2. What is private finance?

Ans: By private finance, we mean the study of the income, debt and expenditure of an individual or a private company or business venture.

3. Which is the best system of public finance?

Ans: The best system of public finance is that which secures the maximum social advantage.

4. What is budget?

Ans: budget is an annual financial statement showing item wise estimates of expected revenue and anticipated expenditure during a fiscal year.

5. What is public revenue?

Ans: A government needs income for the performance of a variety of functions and meeting its expenditure. Thus, the income of the government through all sources like taxes, borrowings, fees, and donations etc. is called public revenue or public income.

6. Mention one distinction between tax and fees.

Ans: Tax is a compulsory payment to the government, whereas fees are a voluntary payment to the government.

7. What is deficit financing?

Ans: Deficit Financing: Deficit means an excess of public expenditure over public revenue. This excess may be met by borrowings from the market, borrowings from abroad, by the central bank creating currency. In case of borrowing from abroad, there cannot be compulsion for the lenders, but in case of internal borrowings there may be compulsion.

8. Mention one objective of budget.

Ans: Estimation of public expenditure

9. What do you mean by public revenue?

Ans: A government needs income for the performance of a variety of functions and meeting its expenditure. Thus, the income of the government through all sources like taxes, borrowings, fees, and donations etc. is called public revenue or public income.

10. What is private expenditure?

Ans: Expenditure incurred by an individual to satisfy his personal want such as health, food, education etc is called private expenditure.

11. Mention one canon of taxation.                         Canon of Equality

12. Mention a tax levied by Municipal Corporation.                          Property Tax

13. Mention one demerit of Indirect tax.                              High tax rate

14. Write the name of a merit good.       

Ans: Education, health care etc example of demerit goods: smoking, drugs, wine

15. What do you mean by deficit financing?

Ans: Deficit Financing: Deficit means an excess of public expenditure over public revenue. This excess may be met by borrowings from the market, borrowings from abroad, by the central bank creating currency. In case of borrowing from abroad, there cannot be compulsion for the lenders, but in case of internal borrowings there may be compulsion.

16. “Direct tax is one which is actually paid by the person on whom it is imposed.” Who defined it?

Ans: Prof. Dalton

17. Mention two main causes of tax evasion.

Ans: High rate of tax, Huge profit making

18. What is the exemption limit of income tax (personal) as per Union Budget?

Ans: 5,00,000

19. Mention a tax levied by Municipal Corporation.

Ans: Water cess

20. Mention any one difference between public expenditure and private expenditure.

Ans: Elasticity exists in case of private expenditure, whereas electricity does not exist in case of public expenditure.

21. What do you mean by ‘finance’?

Ans: Finance is defined as the management of money and includes activities like investing, borrowing, lending, budgeting, saving, and forecasting by the government.

22. The principle of maximum social advantage was introduced by?

Ans: Hugh Dalton

23. What is ZBB?

Ans: Zero Base Budgeting is a new technique for the preparation of budgets. It involves fresh evaluation of every item of expenditure as if it were a new item. It is reconsideration of each item of expenditure from the very beginning.

24. Mention any one distinction between ‘tax’ and ‘fees’.

Ans: Tax is a compulsory payment to the government, whereas fees are a voluntary payment to the government.

25. What is ‘indirect tax’?

Ans: Indirect taxes are those which are imposed on all the goods and services, and not on incomes and profits. Such taxes are collected by the sellers or service provider from their customers. Since consumers are not paying taxes directly to the government, that is why it is called indirect taxes. Example of indirect taxes: Goods and services tax.

26. Mention any one similarity between Public Expenditure and Private Expenditure.

Ans: Both the individual and government try to obtain maximum satisfaction out of the expenditure.

27. Give an example of social goods.   Examples of social goods are clean air, clean water.

28. Mention any one source of public debt of Government of India. 

Ans: Loans from bank and financial institution.

29. State the year in which the Income-tax Act of India was passed.                         1961

30. Mention one example of developmental expenditure of a State in India.       Expenditure on education, health, employment, industry etc.                         

31. Mention a tax levied by Municipal Corporation.                          Property tax

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