Q. The “Tragedy of the Commons” is
✅ Correct Answer: (B)
exhaustion of resources that are collectively owned.
Public Finance MCQs and Notes
Q. A negative externality is
✅ Correct Answer: (C)
hurting effect of a private action on other people
Q. Wiseman‐Peacock hypothesis supports in a much stronger manner the possibility of:
✅ Correct Answer: (A)
an upward trend in public expenditure
Q. The main objective of budgeting is:
✅ Correct Answer: (D)
all of these
Q. The Indian income tax is:
✅ Correct Answer: (D)
direct and progressive
Q. Which one of the following is the most acceptable theory of taxation:
✅ Correct Answer: (C)
ability to pay theory
Q. The system of assigning the source of revenue to the Central as well as State Governments is generally referred to as
✅ Correct Answer: (D)
federal finance
Q. A multilevel decentralized fiscal system involving sharing of fiscal responsibilities between central, state and local governments is referred to as:
✅ Correct Answer: (B)
fiscal federalism
Q. Existence of Centre State economic inequalities is known as
✅ Correct Answer: (A)
vertical imbalance