Tag: public finance and budget

Questions Related to public finance and budget

Governments generally impose higher taxes on the rich, moderate taxes on the not-so-rich and exempt the poor from paying taxes. This principle of taxation is called ______.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. progressive taxation policy

  2. heavy taxation policy

  3. direct taxation policy

  4. protective taxation policy

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Correct Option: A
Explanation:

A progressive tax is a tax in which the tax rate increase as the taxable amount increases. The term "progressive" refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate

The statement of estimated income and expenditure of the Government for a year is ______.

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. public finance

  2. public expenditure

  3. planned expenditure

  4. budget

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Correct Option: D
Explanation:

A budget is an estimation of the revenue and expenses over a specified future period of time and is compiled and re-evaluated on a periodic basis. A surplus budget means profits are anticipated, while a balanced budget means that revenues are expected to equal expenses. A deficit budget means expenses will exceed revenues.

Which of these is a productive public expenditure?

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. Expenditure on law and order

  2. Expenditure on defense

  3. Expenditure on infrastructure development

  4. Expenditure on education

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Correct Option: C

Which of these is a transfer payment?

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. Pension

  2. Scholarship

  3. Unemployment allowance

  4. All of the above

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Correct Option: D

Among these statements which one clearly explains the meaning of "Subsidies"?

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. Payment by Government for purchase of goods and services.

  2. Payment by business enterprises to factors of production.

  3. Payment by companies to shareholders.

  4. Payment by Government to business enterprise without buying any goods and services.

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Correct Option: D

Which of the following is not a productive public expenditure?

economics public expenditure public expenditure public finance and budget public finance, taxes and budget

  1. Expenditure on defence

  2. Expenditure on infrastructure development

  3. Expenditure on setting up basic industries

  4. Expenditure to increase the welfare of the population

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Correct Option: A

Public revenue includes which of the following _______.

economics public finance and budget black money and tax evasion meaning of tax direct taxes

  1. tax revenue

  2. non-tax revenue

  3. capital receipts

  4. all the above

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Correct Option: D
Explanation:

Public revenue includes all the following:

  • Tax revenue: revenue earned by the government by taxing people is called tax-revenue. It is of two types:

  1. Direct tax: tax paid to the government directly. Examples include income tax, gift tax, wealth tax, property tax, etc.
  2. Indirect tax: this tax is collected by an intermediary person from the person who ultimately bears the burden. Examples are sales tax, value-added tax (VAT), goods and services tax (GST), etc.

  • Non-tax Revenue: Non Tax Revenue Receipts are those revenue receipts which are not generated by taxing the public. Examples of non-tax revenue includes revenue from power distribution, irrigation, banking services, insurance, and community services, etc. which make the part of Government business.

  • Capital receipts: this is the income flow from one of the following sources. Cash from the sale of fixed assets, Cash from the sale of shares in the business, Cash from the issuance of a debt instrument which includes loans and bonds.

Income earned by government from the sources other than taxes is called ______.

economics public finance and budget black money and tax evasion meaning of tax direct taxes

  1. private funds

  2. non-tax revenue

  3. public funds

  4. none

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Correct Option: B
Explanation:

Non Tax Revenue receipts are those revenue receipts which are not generated by taxing the public. Example of a non-tax revenue includes revenue from power distribution, irrigation, banking services, insurance, and community services etc. which make the part of the Government business.

Which of the following is a non-tax revenue?

economics public finance and budget black money and tax evasion meaning of tax direct taxes

  1. loans or other borrowing from monetary funds 

  2. aid from abroad

  3. revenue from state-owned enterprises

  4. all the above

Show answer
Correct Option: D
Explanation:

Non Tax Revenue Receipts are those revenue receipts that are not generated by taxing the public. Example of non-tax revenue includes revenue from power distribution, irrigation, banking services, insurance, and community services, etc. which make them part of the Government business. Other examples include loans or other borrowings from monetary funds or other governments that are included under, aid from abroad, revenue from state-owned enterprises, etc.

Amount received from which of the following is not a capital receipt?

economics public finance and budget black money and tax evasion meaning of tax direct taxes

  1. sale of assets

  2. sale of shares

  3. sale of goods and services

  4. all the above

Show answer
Correct Option: C
Explanation:

Capital receipts: This is the income flow from the sale of fixed assets, cash from the sale of shares in the business, cash from the issuance of a debt instrument which includes loans and bonds. The sale of goods and services is not a capital receipt.