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Frame MCQ for module 6 please mention the source.

Which of the following is not imposed by the Central
Government?

(A) Agricultural tax

(B) Corporation tax

(C) Custom duty

(D) Sales tax

Laffer’s curve suggest that the

a) Relationship between tax revenue and tax rates is U‐
shaped
b) Relationship between GDP growth rate and tax rates is U‐
shaped
c) Relationship between tax revenue and tax rates is inverted
U‐shaped
d) Relationship between savings rate and tax rate is inverted
U‐shaped

Which one of the following canons of taxation was not

advocated by Adam Smith?

(a) Canon of equality

(b) Canon of certainty

(c) Canon of convenience

(d) Canon of fiscal adequacy

. Which of the following is the major source of revenue in

India:
(a) Direct tax (b) Capital Levy (c) Grants in aid (d) Indirect
tax

1.Corporation tax is a direct tax. Which of the following is a

correct statement regarding corporate tax?

a) It is levied and appropriated by the states.

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b) It is levied by the union and collected and appropriated by

the states.

c) It is levied by the union and shared by the union and the

states.

d) It is levied by the union and belongs to it exclusively.

2. Taxation is a means to redistribute income among various

classes. A redistribution of income tax can be best brought
through

a) Progressive taxation combined with progressive

expenditure

b) Progressive taxation combined with regressive

expenditure

c) Regressive taxation combined with regressive expenditure

d) Regressive taxation combined with progressive

expenditure

3.Which one of the following statements regarding the

levying, collecting, and distribution of customs duty is
correct?

a) The union levies, collects, and distributes proceeds of

customs duty between itself and the states.

b) The union levies, collects, and keeps all the proceeds of

customs duty to itself.

c) The union levies and collects the tax, but all the proceeds
are distributed among the states.

d) Only the surcharge levied on customs duty is shared

between the union and the states.
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4. Consider the following taxes:

Corporation tax
Customs duty
Wealth tax
Excise duty
Which of the above is/are indirect taxes?

a) 1 only

b) 2 and 4

c) 1 and 3

d) 1, 2, and 3

5. Consider the following statements regarding taxation:

(i)The tax structure is designed according to the ability of
the people to pay taxes.
(ii) The tax is levied on people in proportion to the benefit
they receive from government programmes.
(iii) A progressive taxation system has larger impacts on the
income of poor people than on the income of rich people
Select the correct answer using the codes given below:

a) i only

b) ii and iii only

c) i and ii only

d) i, ii and iii

6.With reference to minimum alternate tax, consider the

following statements:

It is a direct tax that facilitates the taxation of “zero tax

companies”.
It is levied on high net worth individuals whose assets
exceed a certain limit.
It is levied on portfolio investors to discourage withdrawal
of investment from India
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Which of the statements given above is/are correct?

a) 1 only

b) 1 and 3 only

c) 2 and 3 only

d) 1, 2, and 3 only

1. What of the following taxes is applicable in the case of

supply of goods from Gujarat to Assam?

a) CGST
b) SGST
c) UTGST
d) IGST

The most important source of public revenue is :

a) Interest
b) Taxes
c) License fees
d) Dividends and Profits
1. The objectives of taxes are
(a)Raising Revenue
(b)Regulation of Consumption and Production
(c)Reducing Income Inequalities
(d) All of the above.

2. Which of the following is not true about 'Canon of

equality' ?
(a) This canon states that individuals should be taxed
according to their ability to pay taxes.
(b) It is also known as canon of ability
(c) Canon of equality implies a progressive tax system.
(d) It is also known as ‘the pay as you earn method’.
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MCQ-1. Which of the following are not the types of Canons

of Taxation:
A. Canon of certainty
B. Canon of economy
C. Canon of convenience
D. Canon of Sanction

MCQ-2. Which of the following are not the effects of taxes:

A. Effects on the Ability to Work Save.
B. It weakens the short-run stimulus effect.
C. Effects on the will to Work, Save and Invest.
D. Effects on the Allocation of Resources.

MCQ-3. Which of the following are the classification of

Public Debt?
A. Short term and Long Term Loans.
B. Funded and Unfunded or Floating Debt.
C. Voluntary and Compulsory Loans.
D. All of these

MCQ-4. Which of the following are NOT the methods of

Redemption of Public Debt:-
A. Refunding.
B. Capital Levy.
C. Reproductive and deadweight Debt.
D. Terminal Annuity.

Q -1 ) According to the Laffer curve, as tax rates increase

tax revenue ?

a). initially increase and then decrease

b). decrease continuously.
c) rise continuously
d) initially decrease and then increase.

Q -2 ) An annual statement of the estimated receipts and

expenditure of the government
over the fiscal year is known as _________ .

a) Budget
b) Income estimates
c) Account
d) Expenditure

Q - 3 ) Fiscal policy in India is formulated by ---

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a) Reserve bank of India

b) Planning Commission
c) Finance Minister
d) Securities and Exchange Board of India

Source --
1 - https://engineeringinterviewquestions.com/fiscal-policy-
multiple-choice-questions-and-answers/

2 -- https://www.learninsta.com/mcq-questions-for-class-12-
economics-chapter-5-part-a/

1)The Indian tax system is:

(a)Proportional
(b)Progressive
(c)Regressive
(d)Degressive

2)Scope of public finance includes :

(a)Public revenue
(b)Public debt
(c)Public expenditure
(d)All of these

3)Which is the main objective of a tax:

(a)Increase in consumption
(b)increase in production
(c)Raising public revenue
(d)reduction in capital formation

Source: https://www.mgu.ac.in/uploads/2019/07/public.pdf?
x84945
1.Which one of the following is not a tax base ?
A. Income B. Wealth C. Utility D.Consumption
2. Indirect taxes have an element of
A. Equitable B. Certainty C.Economical D.Encourage
honesty
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1. In proportional tax system, the rates of tax remain:

(a) Constant
(b) increasing
(c) decreasing
(d) zero

2.Which objectives government attempts to obtain by

Budget
(a) To Promote Economic Development
(b) Balanced Regional Development
(c) Redistribution of Income and Wealth
(d) All of the above

1) Indirect taxes have an element of :

(a)Equitable
(b)certainity
(c) economical
(c)encourage honesty

2)Direct taxes have the element of :

(a)Evasion
(b)convenient
(c)progressive
(d)Economy

3). In proportional tax system, the rates of tax remain:

(a)Constant
(b)increasing
(c)decreasing
(d)Zero

source : https://www.mgu.ac.in/uploads/2019/07/public.pdf?
x84945
1)In the following which is the characterstic of a tax:
(a)Compulsory
(b)optional
(c)forced
(d)Nationality
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2)Among following canons of taxation which one has been

given by Adam Smith:
(a)Canon of Uniformity
(b)Canon of productivity
(c)canon of diversity
(d)canon of equity

3)The burden of direct taxes is borne by :

(a)Rich person
(b)poor person
(c)on whom it is levied
(d)none of these

Source:https://www.mgu.ac.in/uploads/2019/07/public.pdf?
x84945

1)Education is an example of:

(a) Public good (b) Merit good (c) Social good (d) Club
good

2)Customs duties are imposed on commodities as they cross:

A) State boundaries B) District boundaries C) National
boundaries D) Municipal
boundaries

3)The largest component of revenue expenditure in India is:

A) Pension B) Interest payments C) Education D) Health

Source -
https://www.mgu.ac.in/uploads/2019/07/public.pdf?x84945
1: which of the following is not a taxbase ?
a.income
b. Wealth
c. utility
d. Consumption

2.indirect tax have a element of

a. Equitable
b.certanity
c.economical
d. Encourage honesty

1)Expenditure Tax for India was recommended by:

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(a) Kaldor
(b)Colin Clarke
(c)Adam Smith
(d)Adolph Wagner

2)Corporate Income tax is the tax levied on:

(a)Corporations
(b)Municipalities
(c)Co –operative societies
(d)Companies

3)Which of the following is the major source of revenue in

India:
(a)Direct tax
(b)Capital Levy
(c)Grants in aid
(d) Indirect tax

Source: https://www.mgu.ac.in/uploads/2019/07/public.pdf?
x84945
1. "The government which taxes the least is the best"
a)Mercantilists b) Physiocrates c)Modern c) Classical
2.According to Laffer when tax rate is 100% the tax revenue
will be
a)100% b) 50% c)0 d ) 10%
3. Advolorum duties are levied on
a) length b) weight c) utilities d)value
4. Gift tax was introduced in the year
a) 1958 b)1959 c)1960 d) 1961

Mention the two aspects of taxes?

a.it is not a compulsory payment
b.absence of direct quid Pro quo between tax payer and
public authority
c.no one can refuse to pay taxes.
d.both (b&c)

Which are the direct taxes among the following?

a. Sales tax
b. Capital gain tax
c.annual wealth tax
d. Ad- valorem tax
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e.both (b,c)

It is inequitable and no civilised government in the world

can levy this tax
a.progressive tax
b.proportional tax
c. Regressive tax
d.none of the above