ECO/V/06 Student's Copy
2 0 1 8
Pre-CBCS
5th Semester
ECONOMICS
SIXTH PAPER
Public Finance
Full Marks 75
Time 3 hours
PART A—OBJECTIVE
Marks 25
The figures in the margin indicate full marks for the questions
SECTION—A
Marks 10
Tick the correct answer in the brackets provided 1×10=10
1. From the following, which are the four divisions of public finance?
Land, labour, entrepreneur and capital
Consumption, production, distribution and exchange
Public income, public expenditure, public debt and fiscal
policy
National income, personal income, consumption and
distribution
/257 1 Contd.
2. Non-rivalry is a feature of
public goods
goods but not services
excludable goods
all non-excludable goods
3. Two examples of developmental expenditure are
expenditure on salaries and pension
plan expenditure on railways and shipping
defense expenditure and loan repayment
administrative expenditure and subsidies
4. Government can meet its expenditure by
taxing people
printing new money
borrowing from banks and foreign countries
All of the above
5. What will you call a system of taxation under which the poorer sections
are taxed at higher rates than the richer sections?
Progressive Proportional
Regressive Degressive
6. Which is the main objective of a tax?
Increase in consumption
Increase in production
Raising public revenue
Reduction in capital formation
7. The burden of long-term public loan is on
present generation
past generation
future generation
None of the above
ECO/V/06/257 2 Contd.
8. Government resorted to borrowing when
current revenues equal public expenditure
current revenues exceed public expenditure
current revenues fall short of public expenditure
None of the above
9. The main function of Finance Commission (in India) is
to recommend pay revision of Central Government employees
to formulate monetary policy
to fix rate of income tax
to recommend how the Union Government should share taxes levied
by it with the State
10. The Chairman of the 15th Finance Commission is
N. K. Singh
Shri K. C. Neogi
C. Rangrajan
Dr. Y. V. Reddy
SECTION—B
Marks 15
Write short notes on the following 3×5=15
1. Market failure
2. Canons of public expenditure
3. Incidence of taxes
4. Zero-based budgeting
5. Ricardian equivalence theorem
ECO/V/06/257 3 Contd.
PART B—DESCRIPTIVE
Marks 50
The figures in the margin indicate full marks for the questions
1. Define public finance. Point out the main differences between public
goods and private goods. 4+6=10
OR
Explain the growing importance of public finance in modern times. 10
2. Discuss the classification of public expenditure. 10
OR
What factors are responsible for the growth of public expenditure
in recent years? 10
3. Discuss the canons of taxation. 10
OR
What is taxable capacity? Mention the factors determining taxable
capacity. 3+7=10
4. Explain various sources of public borrowing by the Government. 10
OR
Discuss the role of public debt in a developing country like India. 10
5. Define budget. Explain different kinds of budget. 2+8=10
OR
Discuss the role of the Finance Commission in India. 10