According to Richard Musgrave, how many branches does the public finance system have?

• Two

• Three

• Four

• One

Which of the following is NOT one of the three branches of government activity as per Musgrave’s classification?

• Allocation

• Stabilization

• Privatization

• Distribution

The allocation function of the government is primarily concerned with:

• Redistributing income

• Maintaining price stability

• Providing public goods

• Reducing unemployment

The distribution function focuses on:

• Equalizing production levels

• Distributing goods only

• Redistributing income and wealth

• Allocating scarce resources

Which branch deals with reducing inequality in society?

• Allocation

• Stabilization

• Distribution

• Liberalization

Stabilization function aims to achieve:

• Fair wages

• Equal distribution of wealth

• Economic stability and full employment

• Efficient resource allocation

In Musgrave’s theory, the allocation branch addresses which economic problem?

• Who gets what

• How to produce

• What to produce and how to finance public goods

• Stabilizing inflation

Which of the following would fall under the stabilization function of the government?

• Providing education

• Taxing the rich

• Controlling inflation

• Building infrastructure

Taxation policies to support poor and marginalized sections fall under which branch?

• Allocation

• Distribution

• Stabilization

• None of the above

Which of the following best describes Musgrave’s approach to public finance?

• Government should not interfere in the economy

• Public finance is only about taxation

• Government has three main economic responsibilities: allocation, distribution, and stabilization

• Only the private sector should handle resource allocation