Federal Finance System in India - General Knowledge Multiple Choice Questions and Answers | Page-4

31 A closed economy is one which
A is not a member of the U. N. O.
B does not have a coastal line
C does not trade with other countries
D does not possess any means of international transport

Answer: Option [C]
32 Operating Surplus arises in the
A Government Sector
B Enterprise Sector
C Subsistence farming
D Production for self-consumption

Answer: Option [A]
33 Which of the following taxes is such which does not cause rise in price?
A Sales tax
B Income tax
C Import duty
D None of the above

Answer: Option [B]
34 Who among the following has suggested tax on expenditure?
A Musgrave
B Dalton
C Kaldor
D Gautam Mathur

Answer: Option [C]
35 Excise duty on a commodity is payable with reference to its
A Production
B Production and sale
C Production and transportation
D Production, transportation and sale

Answer: Option [A]
36 What is Value Added Tax (VAT)?
A A new tax to be imposed on the producers of capital goods
B A simple, transparent, easy to pay tax imposed on consumers
C A single tax that replaces State taxes like, surcharge, turnover tax, etc.
D A new initiative taken by the Government to increase the tax-burden of high income groups

Answer: Option [C]
37 A mixed economy works primarily through the
A Market mechanism
B Central allocative machinery
C Market mechanism regulated by Government policy
D Market mechanism guided by Government participation and planning

Answer: Option [D]
38 ‘Golden Handshake Scheme’ is associated with
A Voluntary retirement
B Inviting foreign companies
C Establishing joint enterprises
D Private investment in public enterprises

Answer: Option [A]
39 According to modern thinking the law of diminishing returns applies to
A Mining
B Industry
C Agriculture
D All fields of production

Answer: Option [D]
40 If the tax rate increase with the higher level of income , it shall be called
A Regressive tax
B Lump sum tax
C Progressive tax
D Proportional tax

Answer: Option [C]

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