( Best 30+ ) Public Finance MCQ

by Mr. DJ

Public Finance MCQ

Table of Contents

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Public Finance MCQ

Public Finance MCQ

11. The role of Government would be highest in which of the following type of economy:

A. Free market economy

B. Keynesian Economy

C. Mixed Economy

D. Socialist Economy

12. Taxes are levied to

A. Provide general benefits to the People

B. Encourage people on unnecessary spending

C. Accumulate funds for the Government for future use

D. All of the above

13. Which of the following factors contribute to public debt of a country?

A. To undertake public welfare

B. Urge for economic growth

C. Inefficiencies of public organisations and corruption

D. All of the above

14. Which of the following are the causes of public debt of a country?

A. War or war-preparedness, including nuclear programmes

B. To cover the budget deficits on current account

C. To undertake public welfare schemes

D. All of the above

15. Which of the following statement is INCORRECT with regard to the burden of public debt of a country?

A. If the public debt is taken for productive purposes it will not be a burden on the economy.

B. If the public debt is taken for unproductive purposes, it will impose both money burden and real burden on the economy.

C. In case of Internal Debt, the direct money burden on the economy is huge as transfer of wealth happens within the community

D. In the case of External debt, the amount of repayment of interest and principal represents the direct money burden on the community

16. Public Debt means

A. Borrowing by a Government from abroad and does not include borrowing from within the country

B. Borrowing by general public, private individuals or association of individuals from the Government which they need to repay to Government under the prescribed terms and conditions

C. Borrowing by General Public in the form of loans or advances from the Government, Local Bodies, Government owned financial institutions

D. Borrowing by a Government from within the country or from abroad, from private individuals or association of individuals or from banking and non-banking institutions

17. Debt obligations of the government that have maturities of one year or less is normally called

A. Commercial Papers

B. Commercial Deposits

C. Treasury Bills

D. Certificate of Deposits

18. Which of the following could be a reason for raising public loans by a country?

A. Bringing gap between revenue and expenditure through temporary loans from central bank.

B. To reduce depression in the economy and financing public works program.

C. Financing the public sector for expanding and strengthening the public enterprises

D. All of the above

19. Public Debt has a secular tendency to go up in every country. Which of the following are reasons contributing
to such a trend?

A. Increase trend in Financing of Public works programs

B. Increasing trend in Financing for Economic Development

C. Undertaking of Welfare Schemes by the Government

D. All of the above

20. Expenditure incurred by the Government on building durable assets, like highways, multipurpose dams,
irrigation projects are in the nature of

A. Capital Expenditure

B. Revenue Expenditure

C. Transfer Expenditure

D. Unproductive Expenditure

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