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Reg. No. : .................................... Name : .........................................
Final Year B.A. Degree Examination, March 2009 Part – III – Group – III : ECONOMICS Paper – VI : Optional (C) – Public Economics (Old Scheme – Prior to 2005 Admn.) Time : 3 Hours
Max. Marks : 100
Instruction : Answers may be written either in English or in Malayalam. I. Choose the correct answer. Write only the alphabet : 1) VAT in India is based on the system in a) Australia b) Brazil
c) Germany
2) Lindahl’s name is associated with a) Cost of service b) Benefits Received Theory c) Expediency Approach Theory
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3) ‘Burden of debt’ is stressed by a) Domar b) Hicks
c) Musgrave
4) Which is not a theory of increasing public expenditure ? a) Wagner’s Law of Increasing State Activities b) Wiseman – Peacock Hypothesis c) Dalton’s theory of Maximum Social Advantage 5) As income of a person increases, tax rate also increases. This tax system is a) Progressive b) Regressive c) Proportional (5×1=5 Marls) II. State whether true or false : 6) The first Finance Commission was constituted in 1956. 7) Import duty is an example of direct tax.
P.T.O.
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8) VAT belongs to the family of sales taxes. 9) Balanced budget multiplier is based on Keynesian analysis. (5×1=5 Marks)
10) The Indian Finance Commission is a tenure body. III. Fill in the blanks : 11) ___________ is the Chairman of the 12th Finance Commission. 12) _________ is the author of ‘Principles of Public Finance’.
13) _____________ is the most acceptable, just and equitable theory of taxation. 14) ___________ is a component of external debt. 15) Incidence of tax is defined as ___________ resting place of tax.
(5×1=5 Marks)
IV. Define any four of the following : 16) Indirect tax. 17) Public Finance.
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18) Internal Public Debt. 19) Fiscal Policy. 20) Budget.
(4×1=4 Marks)
V. Answer any seven of the following, each not more than half a page : 21) Functional Finance. 22) Proportional Taxation. 23) Demerits of Direct Tax. 24) Canon of Ability. 25) Balanced Budget. 26) Fiscal Deficit. 27) Peak Load Pricing Method. 28) Automatic Stabilisers. 29) Penalties. 30) Impact of a tax.
(7×3=21 Marks)
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VI. Answer any six, each not more than one page : 31) Intergenerational equity aspect of debt burden. 32) Canons of Public Expenditure. 33) Characteristics of a good tax system. 34) Wiseman – Peacock Hypothesis. 35) Administered Price Mechanism. 36) Musgrave’s theory of incidence. 37) Causes for increasing public expenditure. 38) Nature of local finance in India. 39) Laffer Curve. 40) Performance Vs Programme Budgeting.
(6×5=30 Marks)
VII. Answer any three of the following, each not exceeding three pages :
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41) Discuss the major issues of centre-state financial relations.
42) How does Benefit Principle differ from Ability to Pay Principle ? 43) Critically examine Wagner’s law.
44) Explain the Cost BenefitAnalysis with regard to evaluation of public expenditure. 45) Explain the traditional and modern analysis of incidence of tax. 46) Examine the nature, scope and significance of Public Finance. (3×10=30 Marks) ————————