Online Test — Public Finance
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
Public finance studies the income and expenditure of the:
Firm
Government
Household
Bank
Explanation: Public finance deals with the government's finances.
Question 2 of 15
The annual statement of the government's estimated receipts and expenditure is the:
Budget
Tax
Debt
Subsidy
Explanation: That statement is the government budget.
Question 3 of 15
The two parts of the budget are the revenue budget and the:
Capital budget
Tax budget
Loan budget
Private budget
Explanation: The budget has a revenue budget and a capital budget.
Question 4 of 15
A budget where receipts exceed expenditure is a:
Deficit budget
Surplus budget
Balanced budget
Capital budget
Explanation: Receipts greater than expenditure = surplus budget.
Question 5 of 15
A budget where expenditure exceeds receipts is a:
Surplus budget
Deficit budget
Balanced budget
Revenue budget
Explanation: Expenditure greater than receipts = deficit budget.
Question 6 of 15
Income the government receives is called:
Public expenditure
Public revenue
Public debt
Subsidy
Explanation: Government income is public revenue.
Question 7 of 15
Fees, fines and profits of public enterprises are:
Tax revenue
Non-tax revenue
Public debt
Capital expenditure
Explanation: These are non-tax revenue.
Question 8 of 15
A compulsory payment to the government with no direct return is a:
Fee
Tax
Fine
Loan
Explanation: A tax is a compulsory payment without a direct return.
Question 9 of 15
A tax whose burden cannot be shifted is a:
Direct tax
Indirect tax
Fee
Subsidy
Explanation: A direct tax (e.g. income tax) is borne by the payer.
Question 10 of 15
Income tax is an example of a:
Direct tax
Indirect tax
Non-tax revenue
Capital receipt
Explanation: Income tax is a direct tax.
Question 11 of 15
GST is an example of a:
Direct tax
Indirect tax
Fee
Subsidy
Explanation: GST is an indirect tax whose burden is shifted to consumers.
Question 12 of 15
Spending on salaries and interest that creates no asset is:
Capital expenditure
Revenue expenditure
Public debt
Tax revenue
Explanation: Day-to-day spending with no asset is revenue expenditure.
Question 13 of 15
Building roads and dams is an example of:
Revenue expenditure
Capital expenditure
Non-tax revenue
A direct tax
Explanation: Asset-creating spending is capital expenditure.
Question 14 of 15
Money the government borrows to meet a deficit is:
Public debt
Public revenue
A subsidy
A tax
Explanation: Government borrowing is public debt.
Question 15 of 15
Debt taken from abroad is called:
Internal debt
External debt
Tax debt
Capital revenue
Explanation: Debt from abroad is external debt.