Indian Public Finance – Exercise – 1

6. Inflation is caused by :

(a) increase in supply of goods
(b) increase in cash with the government
(c) decrease in money supply
(d) increase in money supply

7. Which one of the following taxes in India is imposed by the central government on the basis of the ability to pay principle ?

(a) Wealth tax
(b) Gift tax
(c) Corporate tax
(d) Income tax

8. Consider the following : 1. Fringe Benefit Tax 2. Interest Tax 3. Securities Transaction Tax Which of the mentioned above is/are Direct tax/taxes ?

(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) All of these

9. Consider the following taxes : 1. Personal income tax 2. Import duty 3. Service tax Which of the taxes given above is/are Indirect Tax/Taxes ?

(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) Only 2

10. Consider the following taxes : 1. Sales tax 2.Value-added tax 3. Property tax Which of the taxes given above is/are Ad valorem tax/taxes ?

(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) All of these

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