1. Choose the most appropriate answer of the following: 1x8=8
- Which of the following is an example of merit want?
- Low-cost housing.
- Subsidized education.
- Subsidized food.
- All of the above.
- Which of the following is not a direct tax?
- Securities transaction tax.
- Gift tax.
- Corporation tax.
- Entertainment tax.
- According to Colin-Clark, when the share of government sector exceeds 25% in the GNP
- People become less productive.
- Inflation occurs even under balanced budget.
- Both (i) and (ii)
- Neither (i) not (ii)
- According to the classical economists, public finance is a
- Physical science.
- Normative science.
- Positive science.
- None of the above.
- Public enterprises in India have been developed primarily in
- Consumer goods industries.
- Key and public industries.
- Service industries.
- All of the above.
- To decrease economic inequalities, which of the following combinations is best?
- Regressive tax and progressive expenditure.
- Progressive tax and progressive expenditure.
- Proportional tax and proportional expenditure.
- Digressive tax and progressive expenditure.
- The benefits or harms which a firm or an individual causes to another but for which they are not paid or penalized is called
- Third-party effect.
- Spillover effect.
- Externalities.
- All of the above.
- Expenditure which reduces liability and increases assets, is called
- Revenue expenditure.
- Capital expenditure.
- Recurring expenditure.
- All of the above.
2. Write short notes on any four of the following (within 150 words each): 4x4=16
- Meaning of mixed goods and club goods.
- Value added tax.
- Limitations of Wiseman-Peacock hypothesis.
- Public debt management policy.
- Meaning of public enterprises and public utilities.
Answer the following questions (within 500 words each):
3. (a) Explain the important differences between public goods and private goods. Discuss the role of government in providing merit goods. 5+6=11
Or
(b) Explain the principle of maximum social advantage. Do you think violation of equimarginal utility principle will make public finance operations less efficient? Give justifications. 5+1+5=11
4. (a) Distinguish between vertical equity and horizontal equity. In the light of the ability to pay principle, discuss the various concepts of equal sacrifice with the help of a diagram. 2+9=11
Or
(b) What are meant by forwarding shifting and backward shifting of tax? Explain the factors on which shifting and incidence of tax depends. 2+9=11
5. (a) Critically explain the critical limit hypothesis of public expenditure. 11
Or
(b) Critically discuss the role of public expenditure in economic growth and stability. 6+5=11
6. (a) Critically explain how public debt becomes a burden on community with special reference to external debt. 12
Or
(b) (i) Explain the effects of public debt on production and distribution. 6
(ii) “The burden of public debt can be shifted to future generations.” Analyze the statement. 6
Also Read: Dibrugarh University Question Papers
7. (a) Justify the role of public enterprises in less-developed countries.
Or
(b) Discuss critically the ‘no profit no loss’ theory of public enterprises.
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