General Knowledge on Federal Finance System in India - Chapter-wise Economics MULTIPLE CHOICE QUESTIONS with ANSWERS

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.

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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

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Answer: Option [A]

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

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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

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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

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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

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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

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Answer: Option [C]

8 Funds not belonging to the Government are called:

A Contingency Fund

B Private Accounts

C Consolidated Fund

D Public Accounts

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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

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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

View Answer Comment

Answer: Option [C]

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