PUBLIC FINANCE Quizzes
1. PUBLIC expenditure refers to expenditures made by................
A. Private firms
B. Public authorities
C. NGOs
D. International agencies.
2. Public expenditure, if spent properly, exerts an important influence on the entire economy.
A. True
B. False
3. Public expenditure helps to reduce income inequality.
A. True
B. False
4. Which of the following is a direct tax?
A. Excise duty
B. Customs duty
C. Service tax
D. Income tax
5. Government generally imposes higher taxes on rich, moderate taxes on the not- so- rich and
exempts the poor from paying taxes. This principal of taxation is called.............
A. Progressive taxation policy
B. Direct taxation policy
C. Heavy taxation policy
D. Protective taxation policy
6. In an indirect tax, the incidence and impact falls on.......................
A. the same person
B. the different person
7. ............taxes are generally not shifted and are paid in lump sum for the whole year.
A. Direct tax
B. Indirect tax
8. Our tax money is spent on all of the following EXCEPT:
A. Social Security
B. The military
C. Private Social Education
D. National Parks
9. Which of the following is an example of a Capital expenditure?
A. Construction of MPH
B. Supply of medicine
C. Repairing of classrooms
D. Payment made to the laborer’s
10. ............are the expenditures of the government for the maintenance of the existing
infrastructures, to maintain law and order, defense, etc.
A. Developmental expenditures
B. Capital expenditures
C. Non- Developmental expenditures
D. Current expenditures
11. ________ are goods and services that are available to all people at no extra cost. They are
“non-excludable‘ and “non-rival‘
A. Private Goods
B. Public Goods
C. Economic Goods
D. Substitute Goods
12. _________ is a plan of financial operation composed of estimated or proposed
expenditure for a given period or purposed and the proposed means of financing them.
A. Forecasts
B. Budget
C. Debt
D. Options
Answers
1. B 2. A 3. A 4. D 5. A
6. B 7. A 8. C 9. A 10. D
11. B 12. B 13. 14. 15.
16. 17. 18. 19. 20.
HARAMBEE UNIVERSITY Holeta Campus Final exam for Public
Finance and Taxation
NAME___________________________IDNO._
Part I:
1. Public finance is the study of the principles underlying the spending and raising of funds
of public authorities.
2. Public finance relates to the money-raising and income-expenditure functions of the
private entities of the economy.
3. Public e x p e n d i t u r e a n d public r e v e n u e s e e k s t o reduce e c o n o m i c inequality
by distributing whatever is produced equitably among different groups of the community.
4. According to the benefit received approach to taxation, the state provides goods and
services to the members of the society and they contribute to the cost of these supplies in
proportion to the benefit received
5. The best system of taxation from the economic point of view is that which has the best, or
the least bad economic effects.
6. The impact of a tax is on the person who pays the money in the first instance.
Part II: Multiple choices
1. Which of the following is the purpose of governments in imposing taxes?
A. To cover the costs of administration
B. To maintain law and order in the country
C. Defense
D. All but "C"
E. All
2. Which one of the following could not be considered as the characterstics of a good tax
system?
A. It should be in harmony with national objectives.
B. It should recognize basic rights of tax payers.
C. It should appear equitable to the tax payers.
D. Need to have common benefits to all.
E. None of the above
3. One of the following is not among the cannons of taxation as prescribed by Adam Smith?
A. Cannon of equality
B. Cannon of certainity
C. Cannon of convenience
D. Cannon of economy
E. None of the above
4. From among the different approaches to taxation, which approach tried to assesrt that in
reality every tax proposal must pass the test of practicability?
A. Cost-of-service approach
B. Expediency approach
C. Socio-polical approach
D. None of the above
5. Which type of abnormal economic situation could be stablized by making use of
taxation?
A. Stagflation
B. Deflation
C. ‘Inflation
D. "A" and "C"
6. All One of the following is not from among a multitude of factors that can cause the
raising trend of public expenditure in modern times. Identify,
A. Walefare state
B. Defense
C. Population decline
D. Growth of democracy
E. None
7. Which of the following is/are under the categories of direct taxes, except?
A. Income tax
B. Property tax
C. Tax on raw tobacco
D. Inheritance Tax
E. None
