Public Finance Internal Assessment

What is the primary goal of determining tax incidence?

• Assessing government revenue from taxes

• Identifying statutory tax payers

• Understanding who ultimately bears the tax burden

• Analysing market reactions to tax policies

Which of the following is a characteristic of a public good?

• Rivalry in consumption

• Excludability

• Non-excludability

• Private ownership

What is the free rider problem associated with public goods?

• Government subsidies for public goods

• Inability of private firms to produce public goods efficiently

• Individuals benefiting from public goods without contributing to their provision

• Competition among providers of public goods

Which of the following is not typically considered within the scope of public finance?

• Government expenditure

• Taxation policies

• Private sector investments

• Public debt management

Wagner's Law suggests that:

• Government spending tends to increase as a percentage of GDP over time.

• Tax rates should be reduced to stimulate economic growth.

• Inflation decreases as government expenditure increases.

• Government intervention in the economy leads to inefficiencies.

Which statement best describes a negative externality?

• It leads to increased welfare for society as a whole.

• It results in costs imposed on third parties.

• It occurs when a market transaction benefits only the buyer and seller.

• It involves positive spillover effects on production.

Which of the following is an example of a positive externality?

• Pollution from a factory affecting nearby residents' health.

• Vaccination programs reducing disease transmission in a community.

• Traffic congestion causing delays for commuters.

• Noise pollution from construction disturbing nearby businesses.

What is the primary purpose of a government budget?

• To maximize government revenue

• To minimize government expenditure

• To allocate resources efficiently

• To control inflation rates

A government budget that shows planned expenditures exceeding planned revenues is referred to as a:

• Fiscal deficit

• Fiscal surplus

• Budget deficit

• Budget surplus

According to the Peacock-Wiseman hypothesis, government spending tends to increase:

• During periods of economic stability.

• In response to political pressures during fiscal stress.

• When tax revenues exceed projections.

• In countries with low public debt