Notes Public Finance-Online Practice Exam 2 November 22, 2023 April 19, 2024 NET / SET Online Practice Exams Public Finance Test Multi-choice 2 Question 1. Distribution of the burden of paying a tax is called- Answers Option 1 Tax capitalisation Option 2 Shifting of the tax Option 3 Sharing of tax burden Option 4 Incidence of a tax Feedback Wrong choice Incorrect selection Wrong choice Correct selection Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 2. Consider the following statements- In the context of the classical model loan finance may be a means of transferring the burden to the future generation. Foreign borrowing permits financing public programmes without placing a burden on the present generation Foreign borrowing is not burden some to the future generations even if the funds are unproductively. Of the above statements- Answers Option 1 1 alone is correct Option 2 1 and 2 are correct Option 3 1 and 3 are correct Option 4 2 and 3 are correct Feedback Wrong choice Incorrect selection Correct selection Wrong choice Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 3. If supply is perfectly inelastic, then the short run impact of a specific sales tax would be to shift the tax burden- Answers Option 1 entirely on to the producers Option 2 entirely on to the consumers Option 3 equally between the producers and the consumers Option 4 on the other goods where the supply condition may be more elastic Feedback Wrong choice Correct selection Incorrect selection Wrong choice Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 4. In a many person economy with a public and a private goods, revenue allocation will be optimal at the point where- Answers Option 1 the marginal rate of substitution (MRS) is equal to the marginal rate of transformation (MRT) for each individual considered separately Option 2 the summation of the MRS is equal to the MRT Option 3 the MRS is not equal to the MRT since we are dealing with a public goods Option 4 None of the above conditions obtain Feedback Wrong choice Incorrect selection Wrong choice Correct selection Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 5. Assuming a declining marginal utility of money schedule, which one of the following principles will call for “maximum progression”? Answers Option 1 Principle of equal absolute sacrifice Option 2 Principle of equal proportional sacrifice Option 3 Principle of equal marginal sacrifice Option 4 None of the above Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 6. Fiscal and Monetary Policies are intended to combat- Answers Option 1 Cyclical unemployment Option 2 Structural unemployment Option 3 Both (A) and (B) Option 4 Frictional unemployment Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 7. The imposition of a Selective Sales Tax will raise the price of the taxed product by equal amount if it is produced under- Answers Option 1 constant cost Option 2 increasing cost Option 3 decreasing cost Option 4 imperfect competition Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 8. Provision of social goods possess problem because- Answers Option 1 Such goods tend to be non-rival in consumption Option 2 Consumption preferences with respect to such goods are not revealed Option 3 Market mechanism is not well suited for the provision of such goods Option 4 All of the above Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 9. Given a proportional income tax structure and balanced budget, an autonomous increase in investment will increase the level of equilibrium income and the budget will- Answers Option 1 still be in balance Option 2 have a surplus Option 3 have a deficit Option 4 the outcome is uncertain Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 10. Which one of the following is not a source of the “Union Tax revenue”? Answers Option 1 Corporate taxes Option 2 Customs duties Option 3 Property taxes Option 4 Property taxes Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Licensed under the www.myeconomics.info << Prev Next >> "There is no joy in possession without sharing". Share this page. Whatsapp Telegram Facebook
Multi-choice 2 Question 1. Distribution of the burden of paying a tax is called- Answers Option 1 Tax capitalisation Option 2 Shifting of the tax Option 3 Sharing of tax burden Option 4 Incidence of a tax Feedback Wrong choice Incorrect selection Wrong choice Correct selection Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 2. Consider the following statements- In the context of the classical model loan finance may be a means of transferring the burden to the future generation. Foreign borrowing permits financing public programmes without placing a burden on the present generation Foreign borrowing is not burden some to the future generations even if the funds are unproductively. Of the above statements- Answers Option 1 1 alone is correct Option 2 1 and 2 are correct Option 3 1 and 3 are correct Option 4 2 and 3 are correct Feedback Wrong choice Incorrect selection Correct selection Wrong choice Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 3. If supply is perfectly inelastic, then the short run impact of a specific sales tax would be to shift the tax burden- Answers Option 1 entirely on to the producers Option 2 entirely on to the consumers Option 3 equally between the producers and the consumers Option 4 on the other goods where the supply condition may be more elastic Feedback Wrong choice Correct selection Incorrect selection Wrong choice Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 4. In a many person economy with a public and a private goods, revenue allocation will be optimal at the point where- Answers Option 1 the marginal rate of substitution (MRS) is equal to the marginal rate of transformation (MRT) for each individual considered separately Option 2 the summation of the MRS is equal to the MRT Option 3 the MRS is not equal to the MRT since we are dealing with a public goods Option 4 None of the above conditions obtain Feedback Wrong choice Incorrect selection Wrong choice Correct selection Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 5. Assuming a declining marginal utility of money schedule, which one of the following principles will call for “maximum progression”? Answers Option 1 Principle of equal absolute sacrifice Option 2 Principle of equal proportional sacrifice Option 3 Principle of equal marginal sacrifice Option 4 None of the above Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 6. Fiscal and Monetary Policies are intended to combat- Answers Option 1 Cyclical unemployment Option 2 Structural unemployment Option 3 Both (A) and (B) Option 4 Frictional unemployment Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 7. The imposition of a Selective Sales Tax will raise the price of the taxed product by equal amount if it is produced under- Answers Option 1 constant cost Option 2 increasing cost Option 3 decreasing cost Option 4 imperfect competition Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 8. Provision of social goods possess problem because- Answers Option 1 Such goods tend to be non-rival in consumption Option 2 Consumption preferences with respect to such goods are not revealed Option 3 Market mechanism is not well suited for the provision of such goods Option 4 All of the above Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 9. Given a proportional income tax structure and balanced budget, an autonomous increase in investment will increase the level of equilibrium income and the budget will- Answers Option 1 still be in balance Option 2 have a surplus Option 3 have a deficit Option 4 the outcome is uncertain Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 10. Which one of the following is not a source of the “Union Tax revenue”? Answers Option 1 Corporate taxes Option 2 Customs duties Option 3 Property taxes Option 4 Property taxes Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback)
Multi-choice 2 Question 1. Distribution of the burden of paying a tax is called- Answers Option 1 Tax capitalisation Option 2 Shifting of the tax Option 3 Sharing of tax burden Option 4 Incidence of a tax Feedback Wrong choice Incorrect selection Wrong choice Correct selection Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 2. Consider the following statements- In the context of the classical model loan finance may be a means of transferring the burden to the future generation. Foreign borrowing permits financing public programmes without placing a burden on the present generation Foreign borrowing is not burden some to the future generations even if the funds are unproductively. Of the above statements- Answers Option 1 1 alone is correct Option 2 1 and 2 are correct Option 3 1 and 3 are correct Option 4 2 and 3 are correct Feedback Wrong choice Incorrect selection Correct selection Wrong choice Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 3. If supply is perfectly inelastic, then the short run impact of a specific sales tax would be to shift the tax burden- Answers Option 1 entirely on to the producers Option 2 entirely on to the consumers Option 3 equally between the producers and the consumers Option 4 on the other goods where the supply condition may be more elastic Feedback Wrong choice Correct selection Incorrect selection Wrong choice Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 4. In a many person economy with a public and a private goods, revenue allocation will be optimal at the point where- Answers Option 1 the marginal rate of substitution (MRS) is equal to the marginal rate of transformation (MRT) for each individual considered separately Option 2 the summation of the MRS is equal to the MRT Option 3 the MRS is not equal to the MRT since we are dealing with a public goods Option 4 None of the above conditions obtain Feedback Wrong choice Incorrect selection Wrong choice Correct selection Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 5. Assuming a declining marginal utility of money schedule, which one of the following principles will call for “maximum progression”? Answers Option 1 Principle of equal absolute sacrifice Option 2 Principle of equal proportional sacrifice Option 3 Principle of equal marginal sacrifice Option 4 None of the above Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 6. Fiscal and Monetary Policies are intended to combat- Answers Option 1 Cyclical unemployment Option 2 Structural unemployment Option 3 Both (A) and (B) Option 4 Frictional unemployment Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 7. The imposition of a Selective Sales Tax will raise the price of the taxed product by equal amount if it is produced under- Answers Option 1 constant cost Option 2 increasing cost Option 3 decreasing cost Option 4 imperfect competition Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 8. Provision of social goods possess problem because- Answers Option 1 Such goods tend to be non-rival in consumption Option 2 Consumption preferences with respect to such goods are not revealed Option 3 Market mechanism is not well suited for the provision of such goods Option 4 All of the above Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 9. Given a proportional income tax structure and balanced budget, an autonomous increase in investment will increase the level of equilibrium income and the budget will- Answers Option 1 still be in balance Option 2 have a surplus Option 3 have a deficit Option 4 the outcome is uncertain Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 10. Which one of the following is not a source of the “Union Tax revenue”? Answers Option 1 Corporate taxes Option 2 Customs duties Option 3 Property taxes Option 4 Property taxes Feedback Correct selection Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback)