But, in practice, a significant portion of public expenditure is also financed by other sources like public borrowing, profits from public sector enterprises, imposition of fees, penalties etc. The problems of underdeveloped countries are in such a magnitude that they cannot be left at the mercy of the old laissez-faire policy. is called public revenue or public income. 4. Economic Development of Underdeveloped Countries: It is now unanimously agreed that public expenditure plays a positive role especially in the economic development of an underdeveloped country. Emphasis will be given to economical activities and alternative courses of action will also be studies. (a) Define public finance. Corporation tax Union taxes are given in the list of 7th schedule in the constitution. 1 file(s) 188.87 KB. Fundamentals of Macroeconomics - MCQs with answers - Part I. Indian Economy - Growth and Development - MCQs with answers ... Latest Economics Questions for IAS Prelims - Set 2. International organizations and global financial issues - MC... Economics Questions for IAS Prelims - Set 5, Latest Economics Questions for IAS Prelims - Set 3, Macroeconomics - Open Economy - MCQs with answers, Daily current affairs analysis - general studies & awareness, Environment - IAS Mains General Studies Paper - III, General Interest Essays for Competitive Exams, International relations - IAS Mains General Studies Paper - II, Q2 is in the negative that is not in central list but answer is given for central list. Financial Accounting Exam Past Questions And Answers – PDF Documents. Auditing is the most important ingredients of parliamentary control over the finances of country as a hole. CPA Exam Questions. Section B: There are four (4) questions. In the quiz below you will get to test out what you know about different types of taxes and regulations implemented by governments when it comes to business regulation and why they have been put in place. Ans: A government needs income for the performance of a variety of functions and meeting its expenditure. The doses of public spending served to uplift the economic system of the world through the interaction of multiplier principle, from the cruel hands of worldwide depression. No tax or expenditure can be made without the permission of the executive. Interview. Diagrammatical Explanation of the theory of maximum social advantages, Criticism of the theory of Maximum Social Advantages. Finally, public expenditure, particularly repayment of public debt will place additional funds at the disposal of those who can save. 7+4=11. However, Prof. Dalton has defined the term in two senses – broader and narrow sense. On the contrary, in case of boom period public expenditure is incurred in such a way as to increase production and control the rising price-level. The importance/significance/role of public expenditure may be studied under the following heads: Reduction in Disparities of Income and Wealth. Do NOT write in pencil (except for graphs and diagrams). Enforcement of Financial Accountability. Also we have statrted coaching for various competitive exams like RBB, SSC, UGC - NET, State Level Competitive Exams. I interviewed at Public Financial Management. At a time when there was world-wide depression (1929-30), the economies of the world were facing the acute problems of overproduction and mass unemployment, private investment was showing a chronic deficiency, the emphasis was shifted from private spending to public spending. The main ingredients are budgeting, accounting, auditing and purchase and supply.”, INSTRUMENTS/AGENCIES OF FINANCIAL ADMINISTRATION. Attempt any three (3) questions. “All revenues received of all loans by the union or state shall be paid into in the consolidated funds of the union or state, as case may be ad that no money can be written out of. The composition of public revenue is as much important as its size. all these require huge public expenditure. PUBLIC FINANCE QUESTIONS. The Finance Ministry possesses the expert knowledge in financial matters. The principles of maximum social advantage are applied to determine whether the tax or the expenditure has proved to be of the optimum benefit. ANSWER: b. Misuse of government funds: The principle of Maximum social advantage is based on the assumption that the government funds are utilized in the most effective manner to generate marginal social benefit. Zero-base budgeting will be appropriate for those areas whose output is not related to production. That is, after a stage, every increase in public expenditure creates less and less benefit for the people. If a large part of the wealth of the government comes from the poor it is not a sign of a healthy state of affairs. Fees: Fees are another important source of revenue for the government. Taxes on railway freights and fares. The major objectives of public expenditure are. Economic Development of Underdeveloped Countries. ANSWER: d. All the above Interest tax was withdrawn in 2000-01, estate duty abolished in 1985 and gift tax in 1998-99. Again, private finance stresses individual gains whereas public finance attempts at promoting social welfare of the whole community. 3. Public expenditure has, thus, an important rule in reducing economic inequalities in the community. For bringing about an equitable and just distribution of wealth the government can use not only its taxation policy but public expenditure policy can also help to a great extent in achieving this very objective. 7. Assumption of static condition: Conditions in an economy are not static and are continuously changing. Section A: One (1) Compulsory question. In Parliamentary Government, there is a principle that no demands for grants can be made except on recommendation of the executive. In India, the Government has set up several public sector enterprises to provide public goods and services. Sales tax Sales tax is the tax on sale of goods and is influenced by the value added tax system. Public Finance Indian Economy Easy Questions and Answers | Page - 1 Your name must NOT appear anywhere on your answer booklet. Start each new question on a new answer sheet. 1. Taxes are compulsory contributions imposed by the government on its citizens to meet its general expenses incurred for the common good, without any corresponding benefits to the tax payer. 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