ECO/V/CC/06 Student's Copy
2 0 1 8
CBCS
5th Semester
ECONOMICS
SIXTH PAPER
Public Finance
Full Marks 75
Time 3 hours
PART A—OBJECTIVE
Marks 25
The figures in the margin indicate full marks for the questions
SECTION—A
Marks 10
Tick the correct answer in the brackets provided 1×10=10
1. Which of the following is a private good?
Air
Water
Car
Road
2. Who defines public finance as, "the study of the principles underlying the
spending and raising of funds by public authorities"?
Bastable
Findlay Shirras
Harold Groves
Mrs. Ursula Hicks
/83 1 Contd.
3. Which of the following items accounts for the highest expenditure in the
Union Budget, 2018-19?
Food subsidy
Rural development
Agriculture and allied activities
Defence
4. Development expenditure of modern developing economies consists of
expenditure on
social services, economic services and community services
social services, economic services and general services
social services, community services and general services
community services, economic services and general services
5. With a regressive tax, as income
increases, tax rate remains the same
decreases, the tax rate decreases
increases, the tax rate increases
increases, the tax rate decreases
6. All taxes come under
revenue receipts
capital receipts
public debt
deficit financing
7. Redemption of public debt means
payment of interest and repayment of principal by private
individual
payment of interest and repayment of principal by
corporations
payment of interest and repayment of principal by the
government
payment of interest and repayment of principal by
foreigners
ECO/V/CC/06/83 2 Contd.
8. Government resorted to borrowing, when
current revenues fall short of public expenditure
current revenues exceed public expenditure
current revenues equal public expenditure
current revenues exceed current expenditure
9. The Union Budget has
one set of data i.e., Revised Estimate
two sets of data i.e., Revised Estimate and Quick Estimate

three sets of data i.e., Revised Estimate Quick Estimate and
Advance Estimate
four sets of data i.e., Revised Estimate, Quick Estimate, Advance
Estimate and Five-Year Plan Estimate
10. The highest share in budget receipts is
excise
borrowings and other liabilities
corporation tax
customs duties
SECTION—B
Marks 15
Write short notes on the following 3×5=15
1. Meaning of market failure
OR
Private goods and public goods
2. Canon of benefit of public expenditure
OR
Principle of public expenditure
3. Direct and indirect tax
OR
Incidence of a tax
4. Public debt and private debt
OR
Sinking fund method of debt redemption
ECO/V/CC/06/83 3 Contd.
5. Budgetary deficit
OR
Zero-based budgeting
PART B—DESCRIPTIVE
Marks 50
The figures in the margin indicate full marks for the questions
1. What is public finance? Discuss its scope. 3+7=10
OR
Explain the principle of maximum social advantage. Give its limitations.
7+3=10
2. Analyze the causes of growth of public expenditure in recent year. 10
OR
What is public expenditure? Explain the classification of public
expenditure. 2+8=10
3. Discuss the various cannons of taxation. 10
OR
What do you mean by taxable capacity? On what factors taxable
capacity depends? 2+8=10
4. Explain the various types of public debt. 10
OR
Discuss the burden of external debt. How does it affect future
generation? 6+4=10
5. What is revenue budget? Explain revenue receipts and revenue
expenditure. 2+8=10
OR
What is Finance Commission? Examine the main functions of Finance
Commission of India. 3+7=10