SYBCOM SEM-IV Business Economics Question Bank – April 2021

Note: 1. Total questions will be 50

2. Students will attempt any 40
3. Each question carries 1.5 marks
___________________________________________________________________________
Module – I
A. Choose the Correct alternative from below and complete the statements:
Q. 1 Public finance is the _________________
a) Social Science
b) Fiscal Science
c) Government Science
d) Political Science
Q.2 ________ is the study of the role of the government in the economy.
a) Public Revenue
b) Public Expenditure
c) Public Finance
d) Public Investment
Q.3 Public Finance does not include__________
a) Public Revenue
b) Public debt
c) Public expenditure
d) Private savings
Q.4 Who deals with income and expenditure of public authorities?
a) Public finance
b) Private finance
c) Local government
d) Entrepreneurs
Q.5 Public finance deals with which of the following aspect of government?
a) Social
b) Political
c) Financial
d) Human
Q.6 _____ is concerned with the division of income and wealth among its people in a society.
a) Allocation function
b) Growth function
c) Stabilization function
d) Distribution function
Q.7 Social advantage is maximum when_______________
a) Total social benefits are equal to total social sacrifice
b) Total social benefits equal to marginal social sacrifice
c) Marginal social benefits equals to marginal social sacrifice
d) Marginal social benefits minus marginal social sacrifice
Q.8 The principle of maximum social advantage is associated with_________
a) Prof. Dalton
b) Hicks
c) Pigou
d) Keynes
Q.9 Who has used the term ‘the maximum welfare’ instead of “maximum social advantage”.
a) Prof. Dalton
b) Prof. Keynes
c) David Ricardo
d) Prof. Musgrave
Q.10 Which is the measurement of social advantage?
a) Provision for posterity
b) Improvement of labour productivity
c) Economic stability
d) Public expenditure
Q.11 The size of the budget is less than the optimum, when__________
a) Marginal Social Benefit > Marginal Social Sacrifice
b) Marginal Social Benefit < Marginal Social Sacrifice
c) Marginal Social Benefit = Marginal Social Sacrifice
d) Marginal Social Benefit ≠ Marginal Social Sacrifice
Q.12 Public expenditure is subject to diminishing ________
a) Marginal Social Sacrifice
 b) Marginal Social Benefit
c) Marginal Social Investment
d) Marginal Social Savings
Q.13 Taxes are subject to increasing __________
a) Marginal Social Sacrifice
b) Marginal Social Benefit
c) Marginal Social Revenue
d) Marginal Social Expenditure
Q.14 Tests of maximum social advantage have been suggested by ________
a) Pigou
b) Musgrave
c) Dalton
d) Adam Smith
Q.15 According to the Principle of Maximum Social Advantage, Public Expenditure is
subject to __________
a) Diminishing Marginal Returns
b) Diminishing Marginal Productivity
c) Diminishing Marginal Utility
d) Increasing Marginal Utility
Q.16 PPP- curve is illustrated to explain_____________
a) Economic efficiency
b) Government role
c) Government policy
d) Government Revenue
Q. 17 Public goods are _________ in consumption
a) Exclusionary
b) Non-exclusionary
c) Rivalry
d) Monopoly goods
Q.18 Following is not the cause of market failure__________
a) Public goods
b) Natural monopoly
 c) Externalities
d) Profit ratio
Q.19 Production possibility curve is also referred as ___________
a) Production- possibility frontier
b) Consumer curve
c) Producer curve
d) Demand curve
Q.20 ________ introduced the concept of production possibility curve
a) Prof. Alfred Marshall
b) Prof. Paul Samuelson
c) Prof. Baumol
d) Prof. Peter Drucker

Module -II
Q.21 Which of the following is a characteristic of a direct tax?
a) The impact and incidence are on the same person
b) Incidence may be shifted
c) Greater burden on the poor than the rich
d) Major source of revenue in a developing country
Q.22 Which of the following is not a part of administrative revenues?
a) Fees
b) Fines and penalties
c) Special assessment
d) Surpluses of public enterprises
Q.23 _______ is not the characteristic of tax
a) Compulsory payment
b) Levied on commodity/income
c) Involves sacrifice
d) Quid-pro-quo
Q.24 ________ is an example of administrative non-tax revenue.
a) Grants
b) Gifts
c) Fees
d) Profits from public enterprises
Q.25 Special assessment is also known as___________
 a) VAT
b) Tax revenue
c) Betterment levy
d) Indirect burden
Q.26 A tax is a ____________
a) Compulsory contribution of citizen who are liable
b) Optional
c) Political phenomenon
d) External affairs
Q.27 Special assessment means_________
a) General tax on all people
b) A tax for specific benefit conferred
c) Gift tax
d) Entertainment tax
Q.28 Which of the following is not a characteristic of a tax?
a) It is a compulsory payment
b) It has quid –pro-quo
c) It involves sacrifice
d) It is legal
Q.29. Indirect taxes are not levied on which of the following aspects of a commodity
a) Production
b) Sales
c) Movement of goods
d) Profit margin
Q.30 Indirect taxes have a/an ________ effect on the society.
a) Progressive
b) Regressive
c) Equitable
d) Proportional
Q.31 Taxes on luxuries goods are___________
a) Progressive in effect
b) Regressive in effect
c) On film producers
d) Equitable in effect
Q.32 Direct taxes are_________
a) wasteful
b) elastic
c) on everybody
d) less elastic
Q.33 Which is the nature of income tax in India?
a) Proportional
b) Progressive
c) Regressive
d) Degressive
Q.34 Direct taxation is better from of taxation because___________
a) It fetches more revenue
b) It can be more easily collected
c) It allows for taxation according to means
d) It has greater tax compliance
Q.35 Cost- push inflation results from________
a) Direct taxes
b) Indirect taxes
c) Incomes taxes
d) Wealth taxes
Q.36 incidence of tax refers to __________
a) Immediate money burden
b) Indirect real burden
c) Immediate real burden
d) Final money burden
Q.37 Ultimate burden of tax is known as________
a) Impact
b) Incidence
c) Shifting of tax
d) Property tax
Q.38 In case of direct tax, impact and incidence are on ______
a) Same person
b) Different person
c) Sellers
d) Consumer
Q.39 shifting of the burden of tax refers to _______
a) Avoiding of tax
b) Imposing tax
c) Shifting tax burden from one person to another
d) Burden on same person
Q.40 In perfectly elastic demand the entire burden of tax is on _______
a) buyer
b) Seller
 c) Consumer
d) Common man
___________________________________________________________________________
Module – III
Q.41 Government expenditure on maintenance of defense establishments is an example of __
a) Development expenditure
b) Non-development expenditure
c) Capital expenditure
d) Productive expenditure
Q.42 Government expenditure on interest payment is an example of_________
a) Development expenditure
b) Plan expenditure
c) Non-development expenditure
d) Productive expenditure
Q.43 Which of the following is not a part of developmental expenditure?
a) Expenditure on agriculture
b) Expenditure on industries
c) Expenditure on transport
d) Expenditure on administrative services
Q.44 Development expenditure in incurred on __________
a) Defense
b) Interest payment
c) Subsidies
d) Infrastructure
Q.45 Non-transfer expenditure include _________
a) Old-age pension
b) Unemployment allowances
c) Interest payments
d) Expenditure on education
Q.46 Expenditure on ______ is a non-plan expenditure
a) Sarva Shiksha Abhiyan
b) Mid-day meal
c) Interest payment
d) Higher education
Q.47 _______ implies that the public expenditure should bring maximum social advantage to
the entire society.
a) Canon of economy
b) Canon of benefit
 c) Canon of sanction
d) Canon of productivity
Q.48 Public expenditure is incurred to ________
a) Make profits
b) Maximum social welfare
c) Increase surplus
d) Incur debts
Q.49 The controlling authority of government expenditure is ______
a) RBI
b) Ministry of finance
c) Niti Aayog
d) Finance commission
Q.50 Transfer payments do not include_________
a) Old age pension
b) Defense expenditure
c) Interest payment
d) Subsides
Q.51 ______ is not an unproductive expenditure.
a) Defense
b) Administration
c) Energy
d) Interest payments
Q.52 “Law of increasing state activities” was put forward by________
a) Dalton
b) Adolph Wagner
c) Jack Wiseman
d) Allan Peacock
Q.53 Internal debts can be raised from_______
a) R.B.I
b) IMF
c) GRDs
d) W.T.O
Q.54 Which of the following is not a part of the burden of Internal debt?
a) Direct real burden
b) Direct money burden
c) Burden on future generation
d) Effect on private investment
Q.55 Which of the following is not a feature of external debt?
 a) Payment in foreign currency terms
b) Causes income distribution effect
c) Use of coercion of raising funds
d) Involves money burden
Q.56 Loans for which no promise is made by the government regarding their exact date of
repayment are called_________
a) Redeemable debts
b) Irredeemable debts
c) Voluntary debts
d) Productive debts
Q.57 On the basis of the size and composition of external debt, World Bank has classified
India as_______
a) A less indebted country
b) A moderately indebted country
c) A heavily indebted country
d) A severely indebted country
Q.58 _______ arises when government borrow when their expenditure is more than revenue.
a) Public savings
b) Public revenue
c) Public expenses
d) Public debt
Q.59 Public debt management does not refers to _________
a) Private investment
b) Terms of new bonds
c) Maturity
d) Proportion of different components of public debt
Q.60 Which is not the method of public debt management?
a) Refunding
b) Sinking fund
c) Capital levy
d) Employment generation
_________________________________________________________________________
Module – IV
Q.61 Instruments of fiscal policy does not include__________
a) Taxation
b) Government expenditure
c) Public debt
d) Public dividend
Q.62 Fiscal policy is also called_______
a) Budgetary policy
b) Foreign policy
c) Monetary policy
d) Trade policy
Q.63 During deflation, the government adopt _____ fiscal policy
a) Monetary policy
b) Contractionary
c) Expansionary fiscal policy
d) Flexible fiscal policy
Q.64 Sound finance implies________
a) Unbalanced budget
b) Balanced budget
c) Full budget
d) Deficit budget
Q.65 The concept of functional finance was developed by _______
a) J.M. Keynes
b) Kaldor
c) Pigou
d) A.P. Lerner
Q.66 Principle of sound finance refers to ________
a) Minimum government spending
b) Maximum government spending
c) Revenue expenditure balanced at the minimum level.
d) Balanced between tax and spending
Q.67 The neo-Keynesian approach to public finance is called_______
a) Functional finance
b) Aggregate demand
c) Global finance
d) Federal finance
Q.68 Budget is an instrument of _______
a) Monetary policy
b) Fiscal policy
c) Trade policy
d) Exchange rate policy
Q.69 A budget which mainly covers items of current revenue and expenditure is called_____
a) Programme budget
b) Welfare economics
 c) Current budgeting
d) Capital budgeting
Q.70 A budget in which revenue is greater than expenditure______
a) Balanced budget
b) Surplus budget
c) Deficit budget
d) Revenue budget
Q.71 A budget which is prepared by the executive branch of government is ________
a) Legislative budget
b) Executive budget
c) Cash budget
d) Multiple budget
Q.72 The excess of total expenditure over total receipts excluding debt capital receipts is
called_______
a) Revenue deficit
b) Budget deficit
c) Fiscal deficit
d) Primary deficit
Q.73 Hidden subsidies received by public sector units from the government are part of
_____deficit.
a) Primary
b) Fiscal
c) Budgetary
d) Quasi
Q.74 Primary deficit means______
a) Fiscal deficit- Interest
b) Fiscal deficit + Interest
c) Revenue deficit – Interest payments
d) Fiscal deficit + Revenue deficit
Q.75 _______ is a more comprehensive measure of budgetary imbalances.
a) Monetary deficit
b) Primary deficit
c) Fiscal deficit
d) Revenue deficit
Q.76 Which of the following is not an objective of the F.R.B.M. Act. 2003?
a) To bring about zero deficit
b) To reduce the burden of debt repayment
c) To improve transparency in fiscal operations
d) To reduce corruption
Q.77 FRBM Act was to reduce fiscal deficit to _____ of GDP by 31 st March 2009.
a) 3%
b) 5%
c) 8%
d) 9%
Q.78 Chairman of the 14th Finance Commission is _________
a) Dr. Vijay Kelkar
b) Dr. Y.V. Reddy
c) C. Rangarajan
d) K.C. Neogy
Q.79 The Finance Commission is appointed in every _____ years.
a) Two
b) Four
c) Three
d) Five
Q.80 Which article states the list of taxes levied and collected by Union but assigned to
states___________
a) Article 272
b) Article 270
c) Article 268
d) Article 269

Answers Key:
1) – b 29) – d 57) - a
2) – c 30) – c 58) - d
3) – d 31) – a 59) - a
4) – a 32) – b 60) - d
5) – c 33) – b 61) - d
6) – d 34) – c 62) - a
7) – c 35) – b 63) - c
8) – a 36) – d 64) - b
9) – d 37) – b 65) - d
10) –d 38) – a 66) - c
11) – b 39) – c 67) - a
12) – b 40) – b 68) - b
13) – a 41) – b 69) - d
14) – c 42) – c 70) - b
15) – c 43) – d 71) - b
16) – a 44) – d 72) - c
17) – b 45) – d 73) - d
18) – d 46) – c 74) - a
19) – a 47) – b 75) - b
20) – b 48) – b 76) - c
21) – a 49) – d 77) - a
22) – d 50) –b 78) - b
23) – d 51) – c 79) - d
24) – c 52) – b 80) - d
25) – c 53) - a
26) – a 54) - b
27) – b 55) - c
28) – b 56) - b