Unit 3

1. "The government should not tax at least those goods and services which are consumed
by the poor class." Which of the following economists has this recognition?

(a) Dr. Dalton

(b) Prof. Learner

(c) Prof. J.K. Mehta

(d) Prof. Taylor.

2) Which of the following economists is of the opinion that the willingness of most people to
work and save over a period of time is affected by the elasticity of demand for income?

(a) J.S. Mill

(b) Prof. J.K. Mehta

(c) Adam Smith

(d) Records.

3There should be a basic principle at the core of public finance. We can call this the
'principle of maximum social benefit'. This principle is the basis of public finance. This idea
belongs to which of the following economists?

(a) Dr. Dalton

(b) Prof. Adam Smith

(c) From J.B.

(d) Ricardo.

4. “The best system of public finance is one by which the State derives maximum social
benefit from its actions.” This statement is of which of the following economists?

(a) Records

(b) Dr. Dalton

(c) From J.B.

(d) Prof. Adam Smith.

5. Which of the following economists has addressed the 'Principle of Maximum Social
Benefit' as the 'Law of Maximum Collective Welfare' –

(a) Dr. Dalton

(b) Dr. R.N. Bhargava

(c) Prof. Pigu

(d) From J.B.

6. Which of the following economists has addressed the principle of maximum social benefit
as the 'principle of public finance'?

(a) Mrs. Hicks

(b) Prof. Pigu

(c) Dr. Dalton

(d) Dr. R.N. Bhargava.

7. "Tax is a compulsory charge which is imposed by a public authority." This opinion is of

which of the following economists?

(a) Dalton

(b) Plantain

(c) Findlay Shiraz

(d) Unstable.

8.Taxes are generally compulsory contributions." This opinion is of which of the following
economists-

a)Prof. Buehler

(b) Plantain

(Prof. D. Mako

(d) Prof. Tausig.

9.In which of the following years the Direct Taxes Inquiry Committee was formed for the first
time? Was formed-

a)1970

(b) 1976

(c) 1981

(d) 1971.

10. Who among the following was the Chairman of the Direct Taxes Investigation Committee
constituted for the first time?

(a) B.N. Wanchu

(c) N.A. Palkhiwala

(b) L.K. Jha

(d) CC Vigilance.

11. "The tax system of any country has a significant impact on the economy of that country.
In fact, there is no economic activity which is not affected by taxation." This statement is of
which of the following economists?
(a) Prof. Learner

(b) Mrs. Hicks

(c) Prof. Keynes

(d) Dr. Dalton.

12. "From the economic point of view, the best tax system is the one which has the best
economic impact and the least bad impact." This statement is of which of the following
economists?

(a) Dalton

(b) Prof. Learner

(c) Prof. J.K. Mehta

(d) Liver hum.

13. Which of the following modern economists consider the economic effects of taxes to be
very important?

(a) Prof. Keynes

(b) Mrs. Hicks

(c) Prof. Learner

(d) All of the above.

14."The government itself should spend on various items in such a way that the public needs
can be satisfied by the amount spent on each item." This Kagan belongs to which of the
following economists?

(a) Dr. Musgrave

(b) Pegu

(c) Dalton

(d) Prof. Seligman.

15. By what other name is 'approach or principle of profit' called?

(a) Facility provided principle

(b) Tit-for-Tit principle

(c) Principle of sacrifice

(d) Principle of conservation

16. "The principle of profit fails because the services provided by the public cannot be
determined and it is also not possible to determine the services received. This statement is
not true of any of the following

(a) Prof. Seligman

(b) Weston

(c) Prof. Dalton

(d) Adam Smith.

17. Adam Smith has written in his 'Principles of Taxation' that taxation should be done in
such a way that tax should be imposed on all people as equally as possible. Different
economists have taken the meaning of 'equality', 'proportional' from different points of view.
Which of the following economists has derived the meaning of 'Taxation'?

(a) Prof. Findlay Shiraz

(b) Prof. Chapman

(c) Prof. Seligman

(d) Prof. J.S. Mill.

18. "If you want a peaceful government, you have to reduce the budget." This statement is of
which of the following economists?

(a) Records

(b) Sir Henry Parnell

(c) Adam Smith

(d) From J.B.

19. 'Spending even a little more than what is necessary to protect the social order and
protect against foreign invasion is wasteful and injustice to the people.' This statement is of
which of the following economists?

(a) Adam Smith

(b) Sir Henry Parnell

(c) From J.B.

(d) Records.

20. Which of the following principles was propounded by the traditional thinkers of
economics?

(a) Principle of minimum collective sacrifice

(b) Principle of maximum tax transfer

(c) Minimum tax principle

(d) The principle of parsimony.

21. Which of the following economists considered it desirable to limit the scope of work of
the state?

(a) Prof. Adam Smith

(c) Ricardo
(b) From J.B.

(d) All of the above.

22)"Tax is a compulsory contribution given to public authorities. It is according to which of

the following economists-

(a) Prof. J.K Mehta

(b) Philip E. Taylor

(c) Findlay Shiraz

(d) Bastabila

23 Which of the following is the characteristic of tax?

(a) Tax is a compulsory contribution

(b) Tax income is spent on public welfare

(c) Tax is not payment for special benefits

(d) All of the above.

24. “This is a moral ideal principle of tax determination capability.” This statement regarding
tax payable eligibility principle is of which of the following economists?

(a) Prof. Adam Smith

(b) Kohn

(c) Prof. Dalton

(d) Weston.

25. "What could be more equal than a situation under which the individual's contribution to
the aid of the government is such that it results in equal sacrifice for all?" Which of the
following economists has this opinion regarding the appropriateness of the taxability
approach?

(a) J.S. Mill

(b) Kohn

(c) Prof. Dalton

(d) Prof. Adam Smith.

26. Which post was held by Shri B.N. Wanchu before becoming the Chairman of the Direct
Taxes Investigation Committee?

(a) Judge of Allahabad High Court

(b) Chief Justice of the Supreme Court

(c) Chief Election Commissioner

(d) Chairman of the Administrative Reforms Commission.

27. In which of the following years was the Income Tax Settlement Commission constituted?

(a) 1974

(b) 1975

(c) 1976

(d) 19771

28. In 1981, the Economic Administration Reform Commission was formed under the
chairmanship of which of the following?

(a) K.N. Wanchoo

(b) N.A. Palkhiwala

(c) Prof. K.N. Ram

(d) L.K. Jha.

29. Which of the following taxes does not adversely affect the taxpayer -

(a) death tax

(b) Capital tax

(d) None of the above.

(c) Both (a) and (b)

30. Which of the following taxes definitely affect consumption?

(a) sales tax

(b) purchase tax

(c) None of (a) and (b)

(d) Both (a) and (b).

31. Which of the following types of taxes has a wide impact?

(a) Direct taxes

(b) Indirect taxes

(c) Both (a) and (b)

(d) Neither of (a) nor (b).

32. Which of the following economists has propounded the 'Principle of simplicity of
taxation'?

(a) Prof. Armitage Smith

(c) Mrs. Ursula Hicks

(b) Prof. Bastable

(d) Findlay Shiraz.

33. Which of the following economists has considered the element of elasticity in taxation as
important?

(a) Prof. Dalton

(c) Robert Jones

(b) Prof. Bastable

(d) Hobson.

34. Which of the following economists propounded some basic principles after systematically
studying the nature and objectives of taxes?

(a) Prof. Adam Smith

(b) Prof. Chapman

(c) Prof. J.S. Mill

(d) Prof. Seligman.

35. 'Adam Smith's principles of taxation' are given in which of the following books written by
him?

(a) International Currency Experience

(b) Wealth of Nations

(c) Monetary Theory

(d) An Outline of Money.

36. "After Adam Smith, no scholar has been able to keep the rules of taxes in such a simple
and clear form." This statement belongs to which of the following-

(a) Prof. J.S. Mill

(b) Prof. Chapman

(c) Prof. Findlay Shiraz

(d) Prof. Seligman.

37"More certainly it can be said that the burden of tax falls on those who bear the direct
monetary burden." Which of the following economists has this opinion on tax burden?
(a) Dr. Dalton
(b) Adams
(8) J.K. Mehta
(d) Findlay Shiraz.

38"The burden of taxes means the last place of their payment." This statement is of which of
the following economists?
(a) Taylor
(b) Adams
(c) Findlay Shiraz
(d) J.K.Mehta.

39. Which of the following committees was formed to give suggestions for raising more
financial resources from the agricultural sector?
(a) Jha Committee
(b) Raj Committee
(c) Bhootalingam Committee
(d) Wanchu Committee.

40. In which of the following years was the Indirect Tax Investigation Committee constituted?

(a) In 1972
(b) In 1974.
(d) In the year 1981.
(c) In 1976

41. In which of the following years did the Raj Committee present its report?

(a) in 1982
(b) in 1981
(c) in 1971
(d) In 1972.

42. Who among the following was the chairman of Vigilance Committee?

(a) M.A. Palkhiwala

(b) L.K. Jha
(c) Prof. K.N. Ram
(d) K.L. Wanchoo.

43. "The main objective while adopting tax related policy should not be only to obtain
economic profit or surplus but should be to maintain stability in the economy and prevent
boom and recession." This statement is of which of the following economists?

(a) Mrs. Hicks

(c) Prof. Learner

(b) Pegu
(d) Dr. Dalton.

44. In order to study the economic effects of taxes, into how many parts are they divided?
(a) six
(b) five
(c) four
(d) Three.

45. A committee was formed in 1992 to reform the tax structure of the country. Which of the
following was the name of this committee-
(a) Chelaiya Committee
(b) Kelkar Committee
(c) Jha Committee
(d) Wanchu Committee
 Unit 4

1)Fiscal policy is the policy that the government uses to adjust its
expenditure and revenue programs to have desired effects on national
income, production and employment and to prevent unwanted effects."
This statement is of which of the following economists?

(a)-Arthur Smithies

2)In the general budget of the year 2012-13, how many lakhs of the
following rupees have been exempted from income tax? Income up to
(b) Up to 2 lakhs

3)For which of the following purposes are federal excise duties

imposed?
(a) to earn income
(b) For the purpose of controlling the quantity of consumption

4 'Customs duties' are imposed keeping in mind which of the following

objectives-

(a) With the aim of increasing government income

(b) To provide protection to indigenous industries

5. The taxes that are imposed on the income of companies are called
which of the following taxes?
(a) Corporation tax
6. The Central Government collects 'Service Tax' on various types of
services. What rate of service tax has been kept in the budget of year
2012-13?
(c) 13%
7. The budget which is prepared on an annual basis under normal
circumstances is called which of the following budget?
(b) General Budget

8. “Budget is the financial account of the government, hence only

financial aspects should be included in the budget.” This statement is
related to which of the following principles of budget planning?
C.The principle of self-exclusivity

9. The budget should be in accordance with the economic policies and

plans of the government. The budget should have the ability to solve
various economic problems of the government." This opinion is of which
of the following principles related to the budget-
(d) Principle of functional superiority.

10. “Budget is a form in which.” The approved arrangment system of

public income and expenditure is made. Which of the following
economists presented the ABOVE THEORY.
A)Ren storn

11.Which economist called 'Budget the master financialPlan' of the

goverment
(b) Taylor

12. Which of the following economists has called budget an annual

statement of income and expenditure?
(c) Findlay Shiraz

13. Sometimes some departments of the government do not function

with the sanctioned funds. In such a situation, which of the following
budgets is presented?
(a) Supplementary budget

14. The government gets the right to withdraw money from the
Consolidated Fund from which of the following bills?
(b) Appropriation Bill
15."Social welfare can also be increased by increasing the production of
goods and services in the country. But if this is not possible, then social
welfare can also be increased by removing the inequality of wealth in the
society through the distribution of national dividend." This opinion is of
which of the following economists?
c)pigu

16. "The inequality of distribution of wealth through public expenditure

can be removed only when the amount is collected from the rich class
through taxation and spent for the benefit of the poor class." This
statement is of which of the following economists?
d) Prof. J.K.Mehta.

17. During recession, entrepreneurs suffer losses due to fall in prices of

goods and services, as a result they reduce their production. To deal
with this situation, which of the following economists proposed the policy
of 'Public Expenditure' or 'Public Expenditure'?
(a) Prof. Keynes
18. The budget in which the amount of income and expenditure remains
equal is called which of the following types of budget?
(d) Balanced budget.

19. The budget in which there is more expenditure than income is called
which of the following types of budget?
(a) deficit budget

20. "Fiscal policy is concerned with the management of government

expenditure and taxes and the operation of public debts in such a
manner that certain objectives are accomplished." This statement is of
which of the following economists?
(b) Bryce

21. Government securities are which of the following types of loans?

(a) Purchasable loan

22. Loans that do not directly increase income and production, but which
definitely provide social benefit, are which of the following types of
loans?
(b) Dormant loan

23. What type of loans are the loans which the government promises to
repay at some future date?
(c) Payable loan

24. “Public debt is a relatively modern phenomenon and has arisen with
the democratic form of governments in the world.” This statement is of
which of the following economists?
(a) O.J.K.Mehta

25. "Public debt is that debt which the state takes from the citizens of its
own country or from the citizens of other countries." Which of the
following economists has presented this definition of public debt?
(b)-Prof Findlay Shiraz

26. Loans which are used for unproductive work are called which of the
following loans?
(c) dead weight loan
27. The amount of debt owed by a state at any particular time is called
which of the following debts?
(d) Total debt.

28. Which of the following types of loans are called loans which the state
receives from the people and financial institutions of the country?
(d) Internal debt.

29. How many of the following types of internal debt are there?
(a) two

30. Loans from the use of which the government does not get any
monetary income are called which of the following types of loans?
(b) Unproductive debt

31.Fiscal policy is related to the method under which various elements

of revenue collectively achieve various economic objectives to discharge
their responsibilities." This statement is of which of the following
economists?
Mrs. Ursula Hicks
32.“Fiscal policy is the name of changes in taxes and expenditures.”
This opinion is of which of the following economists?
(d) Mr. Otto Eckstein.

33.Which of the following economists were supporters of the policy of

non-intervention in the economy?
(a) Established economists

34. In which of the following years was Income Tax implemented in India
in its present form?
(a) In 1860

15. In which of the following years was the Income Tax Act amended for
the first time?
(b) In 1916

36. In which of the following years was the 'Income Tax Act' passed in
1916 removed?
(c) In 1918

37. After the removal of the Income Tax Act in 1918, in which of the
following years was the new Income Tax Act imposed?
(d) In the year 1922.
38. In which of the following years was the Income Tax Act passed in
1922 completely amended?

a)In 1961