Practice Test

Q1) Optional functions of Government. a) Protection from external attack. b) Provision of education and health services. c) Provision of social security measures. d) Collection of tax. Show Answer

Q2) Obligatory functions of the Government. a) Provision of employment b) Maintaining internal law and order c) Welfare measures d) Exporting goods and services Show Answer

Q3) Definition - Public Finance is one of those subjects which are on the borderline between economics and politics given by- a) Adam Smith b) Alfred Marshall c) Prof. Hugh Dalton d) Prof. Findlay Shirras Show Answer

Q4) Non-tax source of revenue a) Direct and indirect tax b) Direct tax and fees c) Fees d) Special levy Show Answer

Q5) Trends shown by public expenditure of any government shows following trend. a) Constant b) Increasing c) decreasing d) fluctuating Show Answer

Q6) Public finance is _______ a) One of the old branches of economics, which highlights the role of government. b) A study of the principles of income and expenditure of the government. c) Also a part of the study of political science d) Less elastic in supply Show Answer

Q7) Non-tax revenue includes _______. a) Prices of public goods and services b) Gifts, Grants and Donations c) Goods and Service Tax (GST) d) Fines and penalties Show Answer

Q8) The examples of revenue expenditure ______. a) Administration cost of the government b) Huge investments in different developmental projects c) Salaries, allowances and pensions of government employees d) medical and public health services Show Answer

Q9) Reasons for growth in public expenditure. a) Increase in the acitivities of the government b) Repaid increase in population c) Spread of democracy d) Industrial development Show Answer

Q10) Obligatory function of the government includes_______. Show Answer

Q11) There is a continuous growth in public expenditure ________. Show Answer

Q12) Capital expenditure of the government is _______. Show Answer

Q13) The expenditure which results in generation of employment is _______. Show Answer

Q14) Direct tax is paid by the tax-payer_______. Show Answer

Q15) In case of regressive tax, the larger the income of a tax-payer, ________. Show Answer

Q16) Special assessment, fines and penalties are examples of ______. Show Answer

Q17) External debt of the government means ________. Show Answer

Q18) The capital budget consists of ________. Show Answer

Q19) The term ‘budget’ is derived from _______ word ‘Bougette’. Show Answer

Q20) ______ is an example of direct tax. Show Answer

Q21) When government revenue exceeds government expenditure, it is known as ______. Show Answer

Q22) During depression _________ budget is preferable. Show Answer

Q23) The _____ aspects of the government are studied in public economics Show Answer

Q24) The government budget is for _______ Show Answer

Q25) In general, the duration of budget is of ______ months. Show Answer

Q26) In India budget is presented in the parliament by the ______ Show Answer

Q27) According to Prof. ________, “ Budget is a balanced estimate of expenditure and receipts for a given period of time.” Show Answer

Q28) _________ is an example of indirect tax. Show Answer

Q29) ________ is a type of revenue receipt. Show Answer

Q30) If a person violates public rules, than the government will take ______ from the person Show Answer

Q31) Investment expenditure on shares is ______ expenditure. Show Answer

Q32) The budget is monthly statement. Show Answer

Q33) Financial year in India is from 1st March to 28th February. Show Answer

Q34) Indirect taxes are paid directly by people to the government. Show Answer

Q35) Fiscal policy is related with public revenue and public expenditure. Show Answer

Q36) Public revenue always exceeds public expenditure. Show Answer

Q37) In deficit budget expenditure is more than income. Show Answer

Q38) Tax is a major source of revenue of government. Show Answer

Q39) A government budget is prepared for the period of more than one year: Show Answer

Q40) The government budget for uncertain time period: Show Answer

Q41) The government budget is a family budget: Show Answer

Q42) Revenue receipts refers to the receipts which either create a liability or cause reduction in the asset of the government : Show Answer

Q43) Tax is a major source of revenue to the government: Show Answer

Q44) Tax is non compulsory payment made by the people to the government: Show Answer

Q45) Disinvestment is a form of capital Expenditure Show Answer

Q46) Loans granted by the central government to state government are included under capital expenditure: Show Answer

Q47) Donation is not compulsory Show Answer

Q48) The expenditure is more than income in balanced budget: Show Answer

Q49) Balanced budget should be used during depression Show Answer

Q50) In surplus budget, Revenue is greater than expenditure Show Answer

Q51) In deficit budget, expenditure is more than income Show Answer

Q52) Public finance constitutes a part of the study of:
i. Political science
ii. Economics
iii. Management
iv. Sociology Show Answer

Q53)
Identify the component of public finance.
i. Fiscal policy
ii. Financial administration
iii. Public debt
iv. Public expenditure Show Answer

Q54) Identify the example of developmental expenditure.
i. expenditure on health
ii. expenditure on education
iii. expenditure on social welfare
iv. expenditure Research and Development (R & D) Show Answer

Q55)
This is not a reason for growth in public expenditure.
i. Rapid increase in population
ii. Spread of capitalism
iii. Inflation
iv. Increasing defence expenditure Show Answer

Q56) The direct taxes can be:
i. Proportionate
ii. Progressive
iii. Regressive
iv. Indirect in nature Show Answer

Q57) The source of public revenue which is uncertain in nature is:
i. gifts
ii. grants
iii. donations
iv. lending Show Answer

Q58) External debt could be taken from:
i. foreign governments
ii. foreign banks or institutions
iii. international organizations
iv. domestic central bank Show Answer

Q59) Which of these is revenue expenditure in the revenue budget of the central government?
i. interest paid on government borrowings
ii. Investment by government
iii. grants given to state governments
iv. non-tax and tax revenue Show Answer

Q60) Capital payments include expenditure made on:
i. administration cost
ii. investments by government
iii. community development
iv. defence Show Answer

Q61) This is not a type of government budget
i. Surplus budget
ii. Temporary Budget
iii. Balanced Budget
iv. Deficit Budget Show Answer

Q62) The rising unemployment during depression can be checked by:
i. increasing government expenditure
ii. borrowing money
iii. deficit financing
iv. lowering effective demand Show Answer

Q63)
Identify the importance of budget.
i. Medium for implementing economic policies.
ii. Has impact on production, size and distribution of income.
iii. Has impact on the lives of citizens.
iv. Has impact on the functioning of overall economy. Show Answer

Q64) Assertion (A): Public Finance refers to the study of income and expenditure of the citizens.
Reasoning (R): In economics, ‘public’ is used to signify government which represents the public. Show Answer

Q65)
Assertion (A): Till 20th century, functions of government were restricted to optional functions.
Reasoning (R): Till 20th century, majority of the governments adopted a policy of laissez faire. Show Answer

Q66) Assertion (A): Non-developmental expenditure does not yield any productive impact on country.
Reasoning (R): Administration costs, salaries, pensions etc. are examples of non-developmental expenditure. Show Answer

Q67) Assertion (A): Spread of urbanization leads to rise in government expenditure.
Reasoning (R): Urbanization leads to rise in expenses on water supply, roads, energy etc. Show Answer

Q68) Assertion (A): Impact and incidence of direct tax falls on the same person.
Reasoning (R): It is not possible to shift the tax burden of direct tax on others. Show Answer

Q69) Assertion (A): Education fee is a form of non-tax revenue.
Reasoning (R): Fee is paid compulsorily without any return service. Show Answer

Q70) Assertion (A): Internal debt is taken from different sources within the country.
Reasoning (R): Raising debt is the most common activity of any government. Show Answer

Q71) Assertion (A): A surplus budget is more useful during inflationary conditions.
Reasoning (R): Surplus budget lowers the level of taxes in economy. Show Answer

Q72) According to _________, “Public finance is the study of the principles underlying the spending and raising of funds by public authorities.” Show Answer

Q73) __________ finance has tremendous impact on the economy of country. Show Answer

Q74) The government is empowered to print notes through __________. Show Answer

Q75) Till __________ century, majority of the governments adopted policy of laissez faire. Show Answer

Q76) __________ expenditure results in generation of employment, increase in production, price stability etc. Show Answer

Q77) Expenditure on war is an example of __________ expenditure. Show Answer

Q78) As per 2011 Census, India's population was _________ crores. Show Answer

Q79) Modern governments are working for _________ state. Show Answer

Q80) The necessity of public revenue arises due to public ___________. Show Answer

Q81) There are main __________ types of taxes. Show Answer

Q82) _________ has put forward the four canons of taxation. Show Answer

Q83) _________ refers to payment made by citizens of particular locality in exchange for special facilities provided to them by public authorities. Show Answer

Q84) Special levy is charged on commodities whose consumption is _________ to the health and well-being. Show Answer

Q85) In the modern times, _________ have become popular source of revenue. Show Answer

Q86) The government expenditure is generally __________ government revenue. Show Answer

Q87) There are mainly ___________ types of public debt. Show Answer

Q88) In every budget, a set of _________ budget documents describe the details of Government finance in India. Show Answer

Q89) A _________ budget may prove useful during the period of depression. Show Answer

Q90) In modern times, __________ budget is the most commonly implemented policy of any government. Show Answer

Q91) The level of _________ income depends on the tax rates presented in budget. Show Answer