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Federal Finance System in India - General Knowledge Multiple Choice Questions and Answers

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(1) Which one of the following tax is within the jurisdiction of the State Governments as enumerated in List – II of the Constitution of India?
[A] Taxes other than stamp duties on transactions in stock exchange and future markets
[B] Taxes on Railway freights and fares.
[C] Taxes on mineral rights subject to any limitations imposed by the Parliament.
[D] Rate of stamp duty in respect of certain financial documents.

Comment

Answer: Option [C]
(2) Which of the following taxes is introduced in India in 1953 and abolished in 1985?
[A] Estate Duty
[B] Expenditure Tax
[C] Gift Tax
[D] Agricultural Income-tax

Comment

Answer: Option [A]
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(3) The Constitution of India provides for transfer of resources from Centre to States in the form of:
I. Tax sharing
II. Loans
III. Grants-in-aid
IV. Grants for implementation of Five Year Plans
[A] (i), (ii) and (iii) are correct
[B] (i) and (iii) are correct
[C] (i), (iii) and (iv) are correct
[D] All are correct

Comment

Answer: Option [A]
(4) The share of the tax borne by the seller will be larger:
[A] if the demand for the product is less elastic
[B] if the demand for the product is inelastic
[C] if the demand for the product has greater elasticity
[D] if the elasticity of supply of the product is larger

Comment

Answer: Option [C]
(5) The Sarkaria Commission has been appointed by the Government of India to report on:
[A] Child Development
[B] Centre-State relations
[C] Stabilize agricultural prices
[D] Study and report the representation of Backward Classes in the State public services

Comment

Answer: Option [B]
(6) The distribution of the burden of paying a tax is called:
[A] Sharing of tax burden
[B] Shifting of the tax
[C] Incidence of a tax
[D] Tax capitalization

Comment

Answer: Option [C]
(7) Grants from the Centre to the States under the recommendations of Finance Commission are known as:
[A] Plan grants
[B] Development assistance
[C] Statutory grants
[D] Discretionary grants

Comment

Answer: Option [C]
(8) Funds not belonging to the Government are called:
[A] Contingency Fund
[B] Private Accounts
[C] Consolidated Fund
[D] Public Accounts

Comment

Answer: Option [B]
(9) Which are the three inter-related activities involve in the process of Capital Formation?
[A] Savings, Finance and Donation
[B] Savings, Loan and Investment
[C] Donation, Loan and Investment
[D] Savings, Finance and Investment

Comment

Answer: Option [D]
(10) Which of the following is not an element of Financial Organisations?
[A] Public ownership of Financial Institution
[B] Strengthening of Institutional Structure
[C] Establishment of more Microfinance Organizations
[D] Protection to Investors

Comment

Answer: Option [C]

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