Public Finance [IEcoS (Economic Services) Economics Paper-3]: Questions 10 - 18 of 42

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Question 10

Appeared in Year: 2011

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

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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 incidence is thus allow…

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Question 11

Appeared in Year: 2011

Describe in Detail Subjective▾

Explain the growth theory of a firm given by Robin Morris.

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Explanation

  • According to Robin Morris, managers strive to maximize the balanced growth rate of an organization subject to managerial and financial constraints. Morris translates the two growth rates in to two utility functions, which are as follows:
    • Manager՚s utility functions (salary, power, job security, pres…

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Question 12

Appeared in Year: 2011

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Write a short note on Laffer curve.

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Explanation

Laffer curve is an illustration of the thesis that there exists some optimal tax rate which maximizes government tax revenues.

  • The thesis may be expressed in terms of personal or corporate taxes and it proposes that taxes above the optimal rate discourage production and hence result in lower revenues.
  • In other words, if higher income taxes cause disi…

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Question 13

Appeared in Year: 2010

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What do you mean by tax incidence? Analyze how is it determined under the modern theory of incidence of taxation?

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Explanation

  • Tax incidence is defined as its final resting place. It is to be seen and judged in terms of the money burden.
    • Thus, the incidence of a tax is upon that economic unit which finally bear the money burden of it and which are not able to pass it on to others.
    • The modern economists like Dalton were of the view that the shifting of taxation is basically a…

… (261 more words) …

Question 14

Appeared in Year: 2010

Describe in Detail Subjective▾

Explain the concept of equity in taxation. Analyze how ability to pay theory is useful in achieving it.

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Explanation

  • The concept of equity in taxation refers to the social justice in the allocation of tax burden.
    • Equity is identified with other general criteria such as fairness, justice or avoidance of hardship, and linked with particular phenomenon such as distribution of income or property.
    • There are two criteria of equity:
      • Horizontal equity implies that all the t…

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Question 15

Appeared in Year: 2012

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Write a short note on Public Choice theory.

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Explanation

Public choice theory was developed in USA during the past two or three decades. This approach is associated with the economists like A. Downs, J. M. Buchanan and G. Tullock and others.

  • Public choice is concerned with the application of economics with that of political science. The growth of public sector has been an important objective of public cho…

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Question 16

Appeared in Year: 2012

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Explain the methods of determining shadow price.

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Explanation

  • Shadow prices have been used as an adjective in three senses:
    • In mathematical programming, the term is used for interpretation of dual problem and in this sense, the shadow price Lagrange՚s multiplier for constraint optimization.
    • The term is used to cover the benefits and costs that are unpriced.
    • The shadow prices are used in those countries where pri…

… (467 more words) …

Question 17

Appeared in Year: 2010

Describe in Detail Subjective▾

What do you mean by tax incidence? Analyze how is it determined under the modern theory of incidence of taxation?

Edit

Explanation

Tax incidence is defined as its final resting place. It is to be seen and judged in terms of the money burden. Thus, the incidence of a tax is upon that economic unit which finally bear the money burden of it and which are not able to pass it on to others.

  • The modern economists like Dalton were of the view that the shifting of taxation is basically …

… (264 more words) …

Question 18

Appeared in Year: 2018

Describe in Detail Subjective▾

In the case of Corporate Tax, who bears the incidence? Substantiate your answer in the light of Herberger Model. (2012)

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Explanation

Corporation tax is considered to be the most controversial issue in tax incidence analysis.

  • According to the traditional view, shifting of corporation tax is not possible but modern economists do not agree with this view.
  • In the opinion of the traditional thinkers on this subject matter, the burden rests with the stockholders through reduced dividend…

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