Public Finance (IEcoS (Economic Services) Economics Paper-3): Questions 1 - 10 of 26

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Question number: 1

» Public Finance » Theories of Taxation » Incidence of Taxation

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Appeared in Year: 2017

Essay Question▾

Describe in Detail

Distinguish between ‘ability to pay’ and ‘benefit principles’ of taxation. (200w, 15 Marks)

Explanation

  1. Benefits principle of taxation is given by Bowen and Erik Lindahl. And the ability to pay principle of taxation was provided by A. C. Pigou.
  2. The benefits principle takes a market oriented approach to taxation and explains the relationship between the taxpayer and government in quid pro quo terms. However, in ability to pay principle taxes are se

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Question number: 2

» Public Finance » Budgetary Deficits

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Appeared in Year: 2017

Essay Question▾

Describe in Detail

Explain the concepts of revenue deficit, effective revenue deficit, fiscal deficit and primary deficit. (200w, 15 Marks)

Explanation

Deficit is excess of expenditure over revenue received. There are different concepts to measure deficit out of which revenue deficit, effective revenue deficit, fiscal deficit and primary deficit is mostly used in government accounts.

  1. Revenue deficit is the difference between revenue expenditure and revenue receipts. As per the Fiscal Responsi

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Question number: 3

» Public Finance » Budgetary Deficits

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Appeared in Year: 2017

Essay Question▾

Describe in Detail

What do you understand by dead weight loss (excess burden) in commodity taxation? (100w, 5 Marks)

Explanation

Dead weight loss is the fall in total surplus that results from a market disruption such as a tax.

  • In other words, it is a loss of economic efficiency that can occur when equilibrium for a good or service is not achieved.

  • It consists of the loss of consumer surplus for buyers plus the loss of producer surplus for sellers who do not partici

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Question number: 4

» Public Finance » Theories of Taxation » Optimal Taxes and Tax Reforms

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

Write a short note on optimal taxation.

Explanation

Optimal taxation depends upon the trade off between efficiency and fairness.

  • A fair tax is one that guarantees a socially desirable distribution of tax burden; an efficient tax is one with a small excess burden.

  • A fair tax is often the one that imposes equal liabilities on people that have the same ability to pay, whereas an efficient tax

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Question number: 5

» Public Finance » Budgetary Deficits

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Appeared in Year: 2011

Essay Question▾

Describe in Detail

Write a short note on Revenue and Fiscal deficits.

Explanation

Revenue deficit is the gap between total revenue expenditure of the government and its total revenue receipts.

  • The traditional concept of revenue deficit seeks to capture the effect of the budget on the economy in medium term. It gives the information on what the government is borrowing for.

  • The revenue deficit implies a repayment burden

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Question number: 6

» Public Finance » Theory of Public Debt Management

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Appeared in Year: 2010

Essay Question▾

Describe in Detail

Write a short note on Debt trap.

Explanation

Debt trap represents a situation without borrowing afresh or without rescheduling of the repayments obligations, the total indebtedness of the debtor country keep growing or at least it does not decrease.

  • A debt trap is a situation in which a borrower is led into a cycle of re-borrowing, or rolling over, their loan payments because they are u

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Question number: 7

» Public Finance » Theory of Public Debt Management

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Appeared in Year: 2011

Essay Question▾

Describe in Detail

Distinguish between Internal and External Public Debt. In this context, explain the debate on burden of Public Debt.

Explanation

Internal debts refer to public loans raised within the country from its citizen or banks or other financial institutions.

  • External debt, on the other hand, refers to the obligations of a country to foreign government or foreign nationals or international financial institutions.

  • In case of internal debt, the resources remain within the cou

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Question number: 8

» Public Finance » Public Expenditure Policy and Social Cost Benefit Analysis

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Appeared in Year: 2011

Essay Question▾

Describe in Detail

Write a short note on Internal Rate of Return Method of Project Analysis.

Explanation

Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero.

  • Internal rate of return is used to evaluate the attractiveness of a project or investment.

  • If the IRR of a new project exceeds a company’s required rate of return, th

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Question number: 9

» Public Finance » Shadow Prices of Investment

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Appeared in Year: 2011

Essay Question▾

Describe in Detail

Write a note on shadow prices of investment.

Explanation

  • Shadow pricing is used to refer to either one of two things: the actual market value of a money market fund share, or, more commonly, the assignment of a dollar value to an abstract commodity that is not ordinarily quantifiable as having a market price, but needs to be assigned a valuation to conduct a cost-benefit analysis.

    In the latter ins

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Question number: 10

» Public Finance » Theories of Taxation » Incidence of Taxation

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Appeared in Year: 2011

Essay Question▾

Describe in Detail

What are the requirements for a good tax structure? Discuss how far the Benefit Tax principle fits with these criteria.

Explanation

  • The requirements of a good tax structure as follows:

    • Revenue yield should be adequate.

    • The distribution of the tax burden should be equitable. Everyone should be made up to pay his or her fair share.

    • What matters in this context is not only the impact point at which the tax is imposed but its final resting place. The problem of inci

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