Public Revenue MCQs Quiz Multiple Choice Questions & Answers

1. The objective of taxation by the Government are

1. Raising revenue for the state
2. To maintain economic stability
3. To remove disparities in the distribution of income
4. All of the above

2. Which of the following is not a direct tax?

1. Personal Income Tax
2. Service tax
3. Wealth Tax
4. Corporate Income Tax

3. Transfer Payments include

1. Old Age Pension
2. Subsidies
3. Wealth Tax
4. Corporate Income tax

4. The following is an example of commercial non-tax revenue

1. Gifts and Grants
2. Fees
3. Fines
4. Surpluses

5. The following is an example of administrative non-tax revenue

1. Surplus of public undertaking
2. Gifts
3. Fees
4. Grants

6. On what broad aspect of commodities are indirect taxes imposed

1. Production
2. Sales
3. Movement
4. All of the above

7. The following is not a characteristic of a tax

1. It is a compulsory payment
2. Every tax involves a sacrifice by tax payer
3. There is a quid-pro-quo between the tax payer and the Government
4. Refusal to pay tax is a punishable offence

8. The following is a characteristic of indirect tax

1. The impact and incidence are not on the same person.
2. It is levied on income.
3. Taxes are progressive in nature.
4. All of the above

9. The following is a characteristic of a direct tax

1. Incidence may be shifted
2. Imposes more burden on poor
3. The impact and incidence are on the same person
4. All of the above

10. In India service tax was introduced in

1. 1991-92
2. 1994-95
3. 1999-2000
4. 2005-06

11. Special assessment is also known as

1. Tax Revenue
2. Battement Levy
3. VAT
4. None of the above

12. Impact of a tax refers to

1. Final money burden
2. Immediate money burden
3. Indirect real burden
4. None of the above

13. After levying of a tax, if the price does not rise at all, it means that

1. Incidence of the tax remains with producer
2. Tax has been shifted backward
3. Shifting has taken place
4. Any of the above

14. Which factor has no role in the shifting of a tax?

1. Change in prices
2. Elasticity of demand and supply
3. Nature of Demand
4. Income of the consumer

15. Pick out the statement which is not true with regard to tax shifting

1. A purely local tax can be shifted if it is heavy.
2. A purely local tax shifted if it is light
3. Shifting becomes difficult if the people purchase from outside the locality
4. None of the above

16. Pick out the incorrect statement.

1. In the short period, shifting of a tax is easy
2. In the long period shifting of a tax is easy
3. When supply is elastic, shifting is easy
4. None of the above

17. Pick out the tax which is not a part of indirect tax

1. Excise Duty
2. Sales Tax
3. Entertainment Tax
4. Corporate Tax

18. Pick out the characteristic which is not true of direct tax

1. Simplicity
2. Elasticity
3. Creates Civic Consciousness
4. Encourages savings and investment

19. Pick out the factor which is not a feature of indirect taxes

1. Convenience
2. Tax evasion is difficult
3. Fair to the poor
4. Powerful tool of economic policy

20. Pick out the factor which is not a demerit of indirect taxes

1. Unjust to poor
2. Inflationary in nature
3. A tool of economic policy
4. High administrative cost

21. An ad valorem tax is charged according to the

1. Value of a commodity
2. Weight of the commodity
3. Size of the commodity
4. None of the above

22. Specific duty is charged according to

1. Value of a commodity
2. Weight of the commodity
3. Size of the commodity
4. None of the above

23. An example of direct tax is

1. Sales tax
2. Central excise duty
3. Custom duty
4. Wealth tax

24. .......................based on the principle higher the income, higher the tax

1. Progressive Tax
2. Proportion Tax
3. Regressive Tax
4. Digressive Tax

25. Generally, the nature of indirect tax is

1. Progressive
2. Regressive
3. Proportional
4. None of the above

26. Direct tax are..........................in nature

1. Progressive
2. Equitable
3. Regressive
4. None of the above

27. An increase in the direct tax means it is

1. Inflationary
2. Anti-inflationary
3. Having no impact on price
4. None of the above

28. The term impact of taxation means

1. Initial burden of the tax
2. Ultimate burden of the tax
3. Burden of tax on government
4. None of the above

29. The term incidence of taxation refers to

1. Initial burden of the tax
2. Final burden of the tax
3. Burden of tax on government
4. None of the above

30. The ultimate burden of taxation on producer implies

1. Inelastic Supply and Elastic Demand
2. Elastic Supply and Demand
3. Inelastic Supply and Demand
4. Elastic Supply and Inelastic Demand

31. The shared burden of taxation on consumer and producer implies

1. Inelastic Supply and Elastic Demand
2. Elastic Supply and Demand
3. Inelastic Supply and Demand
4. Elastic Supply and Inelastic Demand