A government budget is best defined as
A A statement of assets and liabilities
B An annual financial statement of receipts and expenditures
C A report of public debt
D A plan of monetary policy
Government budget is an annual statement showing estimated receipts and expenditures for a financial year.
The main purpose of a government budget is to
A Maximize profit
B Control population
C Achieve economic and social objectives
D Increase exports only
Government budget aims at growth, equity, stability, and welfare.
Which of the following is NOT a component of government budget?
A Revenue budget
B Capital budget
C Monetary budget
D Consolidated Fund
Budget is divided into revenue and capital budgets, not monetary budget.
Revenue budget consists of
A Capital receipts and capital expenditure
B Revenue receipts and revenue expenditure
C Revenue receipts and capital expenditure
D Capital receipts and revenue expenditure
Revenue budget deals with recurring income and expenses.
Capital budget includes
A Revenue receipts
B Revenue expenditure
C Capital receipts and capital expenditure
D Tax receipts only
Capital budget records long-term receipts and expenditures.
Public revenue refers to
A Income of private sector
B Income of households
C Income of the government
D Income of public enterprises only
Public revenue is the income earned by the government from various sources.
The most important source of public revenue is
A Fees
B Fines
C Taxes
D Grants
Taxes form the major portion of government revenue.
Taxes are compulsory payments because
A They give direct benefit
B They are optional
C They are imposed by law
D They are voluntary contributions
Taxes are legally enforced compulsory contributions.
Which of the following is a non-tax revenue?
A Income tax
B Excise duty
C Customs duty
D Fees
Fees are payments for specific services, not taxes.
Public revenue does NOT include
A Taxes
B Fees
C Borrowings
D Fines
Borrowings are capital receipts, not revenue.
Tax revenue is classified into
A Revenue and capital
B Direct and indirect
C Progressive and regressive
D Proportional and ad-valorem
Taxes are broadly classified as direct and indirect taxes.
A direct tax is one where
A Burden can be shifted
B Burden cannot be shifted
C Burden is shared
D Burden is optional
In direct tax, impact and incidence fall on same person.
Which of the following is a direct tax?
A GST
B Excise duty
C Income tax
D Sales tax
Income tax is directly paid by the taxpayer.
Indirect taxes are those
A Paid directly to government
B Whose burden can be shifted
C Paid voluntarily
D Paid only by producers
Indirect taxes are shifted to consumers through prices.
Which of the following is an indirect tax?
A Corporation tax
B Wealth tax
C Income tax
D GST
GST is collected from consumers indirectly through sellers.
Non-tax revenue includes
A Income tax
B Corporate tax
C Profits of public enterprises
D Customs duty
Government earns non-tax revenue from PSUs, fees, fines, etc.
Fees differ from taxes because fees
A Are compulsory
B Are paid without service
C Have quid pro quo
D Are paid by law only
Fees involve a direct service in return.
Fine is imposed as a
A Reward
B Tax
C Penalty
D Fee
Fine is a penalty for violating laws.
Grant received by government is
A Tax revenue
B Capital receipt
C Non-tax revenue
D Borrowing
Grants are part of non-tax revenue.
Adam Smith laid down canons of taxation to ensure
A Maximum revenue
B Administrative convenience
C A good tax system
D Political stability
Canons guide efficient and fair taxation.
The canon of equality implies
A Equal tax for all
B Tax according to ability to pay
C High tax on rich only
D Proportional tax system
Tax burden should be based on taxpayer’s ability.
Canon of certainty means
A Tax should be flexible
B Tax should be progressive
C Tax amount and time should be certain
D Tax should change frequently
Certainty avoids arbitrariness and corruption.
Canon of convenience relates to
A Tax rate
B Time and mode of payment
C Tax burden
D Tax base
Tax should be collected at a convenient time and manner.
Canon of economy means
A Low tax rates
B High revenue
C Low cost of tax collection
D Progressive taxation
Cost of collection should be minimal.
Ability-to-pay principle supports
A Regressive tax
B Proportional tax
C Progressive tax
D Lump-sum tax
Progressive taxes rise with income.
Which canon emphasizes minimum inconvenience to taxpayers?
A Equality
B Certainty
C Convenience
D Economy
Convenience reduces resistance to taxation.
Which canon reduces tax evasion?
A Equality
B Certainty
C Economy
D Productivity
Certainty limits manipulation and evasion.
A good tax system should be
A Arbitrary
B Uncertain
C Flexible
D Regressive
Flexibility allows adjustment with economic conditions.
Which principle states that taxpayers should sacrifice equally?
A Cost of service
B Benefit principle
C Ability-to-pay principle
D Sacrifice principle
Sacrifice principle focuses on equal loss of utility.
Benefit principle of taxation suggests that
A Taxes are compulsory
B Taxes are arbitrary
C People pay taxes in proportion to benefits received
D Only rich should pay taxes
Taxes are linked to benefits derived from public services.
Which tax is considered most equitable?
A Indirect tax
B Regressive tax
C Progressive tax
D Lump-sum tax
Progressive taxes follow ability-to-pay principle.
Lump-sum tax is criticized because it
A Is progressive
B Ignores ability to pay
C Is indirect
D Has high collection cost
Same tax on all is unfair to poor.
Which tax violates canon of equality?
A Progressive tax
B Proportional tax
C Lump-sum tax
D Income tax
Lump-sum tax ignores income differences.
Tax revenue is called productive when it
A Is easy to collect
B Grows with national income
C Is equitable
D Is indirect
Productive taxes yield increasing revenue with growth.
Which tax has in-built elasticity?
A Lump-sum tax
B Proportional tax
C Progressive income tax
D Indirect tax
Progressive income tax increases revenue automatically.
The principle of maximum social advantage was given by
A Adam Smith
B Ricardo
C Dalton
D Keynes
Dalton emphasized balancing social benefits and sacrifices.
Taxation should minimize
A Revenue
B Growth
C Social sacrifice
D Equity
Objective is maximum net social benefit.
Which of the following best reflects public revenue?
A Government borrowings
B Deficit financing
C Tax and non-tax income
D Capital losses
Public revenue includes regular income sources.
Which source of revenue is compulsory?
A Fees
B Grants
C Taxes
D Fines
Taxes are compulsory by law.
Non-tax revenue is important because it
A Reduces tax burden
B Is compulsory
C Is regressive
D Increases inequality
It supplements tax revenue and reduces tax pressure.
Which payment lacks quid pro quo?
A Fee
B Tax
C Price
D Rent
Taxes are paid without direct benefit.
Tax imposed on wealth transfer is
A Income tax
B GST
C Excise duty
D Wealth tax
Wealth tax targets ownership or transfer of wealth.
Tax evasion mainly violates which canon?
A Equality
B Certainty
C Economy
D Convenience
Lack of clarity encourages evasion.
Which of the following improves tax compliance?
A High tax rate
B Tax certainty
C Tax secrecy
D Frequent changes
Clear rules improve compliance.
Progressive taxation is justified on grounds of
A Benefit principle
B Cost of service
C Ability to pay
D Proportionality
Rich can bear higher tax burden.
Which canon is violated if tax collection cost is high?
A Equality
B Economy
C Certainty
D Convenience
Economy requires low administrative cost.
Which revenue source is most stable?
A Taxes
B Fees
C Borrowings
D Grants
Taxes provide stable and continuous income.
A tax system should promote
A Inflation
B Inequality
C Economic stability
D Capital flight
Sound taxation supports stable growth.
Which is NOT a canon of taxation?
A Equality
B Certainty
C Productivity
D Economy
Productivity is desirable but not a classical canon.
The objective of public revenue collection is to
A Earn profit
B Control population
C Finance public expenditure
D Eliminate private sector
Revenue funds public services and development.