SEMESTER III MCQs

PUBLIC FINANCE -ECONOMICS PAPER-IV

1. C.F. Bastable defines, “Public finance deals with the expenditure and
income of public authorities of the state and their mutual relation as also
with the____________ ,”
A. financial assignment and control
B. financial acceptability and control
C. financial administration and control
D. financial administration and comptroller of country

2. Private goods are ________

A. Exotic
B. Excludable
C. Acceptable
D. Exceptional

3. __________ occur when one person’s actions affect another person’s well-
being
A. Internality
B. Exceptionality
C. Acceptability
D. Externalities

4. _________ is concerned with how resources are distributed throughout

society
A. Quality
B. Activity
C. Quantity
D. Equity

5. Public finance is an economic sector that allocates _____- to various public

entities based on the set budget and timelines
A. Grains
B. Equipment
C. Funds
D. Portfolio
6. In _______- countries, the main problem is of Economic Growth
A. Developed
B. About to develop
C. Rich
D. Developing

7. Under the modern concept of public finance, taxation is considered as an

important source for increasing social justice and __________- in income
A. reducing the qualities
B. reducing the quantities
C. reducing the inequalities
D. increasing the inequalities

8. The government usually has a ______ budget

A. Balanced
B. Reasonable
C. Surplus
D. deficit

9. Time horizon of public finance is __________ year

A. one academic
B. financial quarter
C. one financial
D. half

10.Public finance Transactions are _________

A. known to ministers only
B. known to politicians
C. not known to all
D. open and known to all

11.________ is a product or service produced by a privately owned business

and purchased to increase the utility, or satisfaction, of the buyer

A. Public good
B. Necessary goods
C. Luxury goods
D. Private good
12.The concept of fiscal policy received a new vista with the inception of
_________ economics in modern times
A. Marshallian
B. Smith
C. Pigo-vian
D. Keynesian

13.__________ is the economic situation defined by an inefficient distribution

of goods and services in the free market
A. Goods supply failure
B. Goods demand failure
C. Market failure
D. Monsoon failure

14.GPD = Gross Fiscal Deficit - _______________________

A. Debt Payments
B. Interest Payments
C. Interest Receipt
D. Debt Receipt

15.FD = (TE + NL) – (RR + _________________ + EG)

A. NEGR
B. RDCN
C. NDCR
D. NCDR

16. Loans for a period of less than ________are known as short-term deb
A. one years
B. two years
C. three years
D. four years

17.Activities and functions of the state and local government expanded in

________________ economy.
A. underdeveloped state
B. developed state
C. welfare state
D. developing state

18.The productive debts are ________________________ in nature.

A. safe-liquidating
B. self-liquidating
C. sell-liquidating
D. selective-liquidating

19.External debt creates direct ___________________________ burden.

A. money
B. fiscal
C. political
D. social
20.Lack of infrastructure development discourages private investment, which
affects ____________________.
A. economic growth
B. economic balance
C. economic trend
D. economic plan

21.Over the years the Central Government’s outstanding debt has increased
by _________________ between 1990-91 and 2009-10.
A. 14.4 times
B. 13.4 times
C. 12.4 times
D. 11.4 times

22. NSA is a difference between _____________________

A. MSV & MSB
B. MSS & MSB
C. MSS & MSD
D. MSB & MSD

23.All taxes are subject to increasing _____________________

A. Disutility
B. Utility
C. Income
D. Expenses

24.According to ____________ the best system of public finance is that which

secures the maximum social advantage from the operations.
A. Hugh Dalton
B. Hugh Milton
C. Marshall
D. Keynes

25._________________ terms 'Maximum Social Advantage' as the

'Maximum Welfare Principle of Budget Determination’.
A. Richard milton
B. Richard musgrave
C. Richard friedman
D. Richard boon

26.The government plays an important to improve _____________________.

A. defence efficiency
B. political efficiency
C. economic inefficiency
D. economic efficiency
27.The government make the provision of ______________ are those that
cannot provided through the market.
A. private and public goods
B. public and merit goods
C. public and necessary goods
D. Giffen and merit goods

28.___________________ lead to "market failure”.

A. Expansionability
B. Marketabilities
C. Internalities
D. Externalities

29. In an unbalanced budget, the revenues and expenditures are

__________________________.
A. not equal
B. equal
C. overlapped
D. underdeveloped

30.According to Constitution of India, there is a _________________ system

of government.
A. six-tier
B. four-tier
C. three-tier
D. two-tier

31.A ______________________ is paid by a person on whom it is legally

imposed.
A. excise duty
B. indirect tax
C. direct tax
D. transport tax

32.Indirect taxes are imposed on goods and services but burden shifted to
__________________________.
A. the final consumer
B. the final seller
C. the final producer
D. the final organization

33.Incidence __________________ be shifted.

A. partially
B. compulsorily
C. can
D. cannot

34.Producers force his workers to accept lower wages, is a ______________

A. forward shifting
B. backward shifting
C. no shifting
D. combination shifting

35.Tax system is required to be good in order to achieve several

_____________________.
A. socio-economic objectives
B. socio-political objectives
C. socio-economic development
D. socio-political development

36.________________ consist interest, dividend, fees and other receipts for

services of the government.
 A. Non-tax expenses
B. Tax expenses
C. Non-tax revenue
D. Tax revenue
37.When revenues are greater than expenditures, then there is
___________________ budget.
A. surplus
B. deficit
C. neutral
D. extra

38.In the case of __________________ externalities like research, firms

produce too little.
A. Innovative
B. Neutral
C. Negative
D. Positive

39.FRBM act refers to - __________

A. Fractional Responsibility and Budget Management act
B. Fiscal Responsibility and Budget Management act
C. Fiscal irresponsibility and Budget Management act
D. Fiscal Responsibility and Budget Marginal act

40.FRBM was enacted, to get the ________ effectively

A. fiscal balance
B. fiscal imbalance
C. frictional balance
D. frictional imbalance
41.The _________ finance commission recommended for increasing share
of states in central taxes to 42%, the single largest increase ever
recommended
A. 11th
B. 12th
C. 14th
D. 15th

42.___________ tries, to ensure greater transparency in the fiscal

operations of the central government
A. FBRM
B. FMBR
C. MFBR
D. FRBM

43.The FRBM Act became effective from __________

A. 2003
B. 2002
C. 2004
D. 2006

44.The revenue deficit was, however, supposed to be reduced to ______ by

the year 2008-09
A. Two
B. One
C. Five
D. Zero
45.Adherence to the FRBM targets is critical to ensure budgetary
sustainability and _____ stability
A. Macro-economic
B. Political
C. Social
D. Regional

46.FRBM tries, to ensure greater _________ in the fiscal operations of the

central government
A. Translucent
B. Opaque
C. Transparency
D. Colour

47.The FRBM Act required the ______ of Revenue Deficit by 2008-09

A. Selection
B. Elimination
C. Election
D. Section

48.The 14th finance commission's chairman was former Reserve Bank of

India governor __________
A. Bimal Jalan
B. Raghuram Rajan
C. Y. V. Reddy
D. Subbarao

49.The recommendations of the 14th commission entered force in ______

A. Year 2010
B. Year 2008
C. Year 2015
D. Year 2019
50.The FRBM Act is thus an important step in the direction of _________
fiscal deficit over a period of time
A. Increasing
B. Raising
C. Reducing
D. Equalizing