Ba 2yr Sem4 - Ia Qp - Public Finance.docx

O.U. INTERNAL ASSESSMENT EXAMINATION – MARCH 2019 B.A. 2nd YEAR SEM-4 PUBLIC ECONOMICS ANSWER ALL QUESTIONS TOTAL MARKS: 15 PART – A: MULTIPLE CHOICE QUESTIONS (10 x ½ = 5 MARKS)

1. A. B. C. D.

Government finance is called: National finance Public finance Private finance (a) and (b) of above

2. A. B. C. D.

Govt. taxing and spending policies are called: Monetary policy Fiscal policy Commercial policy Finance policy

3. A. B. C. D.

The difference between revenue expenditure and revenue receipts is Revenue deficit Fiscal deficit Budget deficit Primary deficit

4. A. B. C. D.

The difference between total expenditure and total receipts is Fiscal deficit Budget deficit Primary deficit Revenue deficit

5. A. B. C. D.

Govt. budget is balanced when: Govt. expenditure outstrips tax receipts Govt. tax receipts outstrips expenditure Government expenditure equals tax revenue None of the above

6. A. B. C. D.

Effects of Public expenditure are Consumption Allocation of Resources Production All of the above

7. The concentrations effect explained in Peacock-Wiseman hypothesis implies A. Public expenditure does not increase in smooth and continuous manner B. The Central Government’s economic activity to grow faster than that of Regional Governments C. Public expenditure increases the necessity of increased revenue

D. Absolute level of public expenditure increases 8. Who is the exponent of the law of increasing state activities? A. Dalton B. Wagner C. Seligman D. Musgrave 9. A criterion by which public goods are distinguished from private goods: A. Exclusion principle B. Externality principle C. Public choice principle D. None of the above 10. Wiseman‐Peacock hypotheses supports in a much stronger manner the possibility of: A. An upward trend in public expenditure B. A downward trend in public expenditure C. A constancy of public expenditure D. A mixed trend in public expenditure

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

PART – B: FILL IN THE BLANKS (10 x ½ = 5 MARKS) Important difference between public and private finance is with regard to nature of ______________. The income of the state is referred to as ______________. ______________ arises when the governments borrow when their expenditure is more than revenue. Now it is being increasingly recognized that government expenditure and revenue programme exert influence upon the ______________. Concepts of concentration and displacement effect in public expenditure is attributed to ______________. Maximum Social Advantage is achieved when ___________________________. According to Wagner, the state activities increase _____________________. According to Wiseman and Peacock, the state activities increase ___________________. An example of Toll goods is ________________. Government engages in _____________ goods.

PART – C: SHORT QUESTIONS (1 x 5 = 5 MARKS) 1. What does Fiscal Policy refers to? _________________________________________________________________________ _________________________________________________________________________ 2. Define Public Goods. _________________________________________________________________________ _________________________________________________________________________ 3. What are the four functions as given by Richard Musgrave?

_________________________________________________________________________ _________________________________________________________________________ 4. State the Principle of Maximum Social Advantage _________________________________________________________________________ _________________________________________________________________________ 5. State Peacock-Wiseman Hypothesis _________________________________________________________________________ _________________________________________________________________________