Free Public Finance MCQs with Answers
406 Public Finance MCQs from Economics, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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406 questions · page 5 of 21
- A. government is symbol state is the process
- B. government is a process that includes the people who exercise political power
- C. the state is an abstract symbol of the political institution
- D. government is a process and the state is an abstract symbol
Explanation: Government is the process and set of institutions through which political power is exercised, whereas the state is the broader political…
Correct answer: government is a process and the state is an abstract symbol- A. the legitimacy of nation -states depends upon propaganda and internal surveillance
- B. industrial nations depend upon raw materials located in no-industrial nations
- C. Third-World countries are maintained in a state of dependency by First-and Second- World nations
- D. the effectiveness of the United Nations depends upon a cohesive Security Council
Explanation: Dependency theory holds that less-developed or Third-World countries remain economically and politically dependent on more powerful First-…
Correct answer: Third-World countries are maintained in a state of dependency by First-and Second- World nations- A. high tuitions
- B. a lowering of standards
- C. muzzling of academic freedom
- D. all of the above
Explanation: Common criticisms of higher education include expensive tuition, falling academic standards, and restrictions on academic freedom.
Correct answer: all of the above- A. large shopping malls
- B. many high income taxpayers
- C. continual building of new industries
- D. a reduced tax base
Explanation: Suburbanisation drew residents and businesses away from central cities, often leaving them with fewer taxpayers and a reduced tax base.
Correct answer: a reduced tax base- A. The goals of the society
- B. Economic activities in which the government engages for the public good
- C. Economic activities in which self-interest makes for personal affluence
- D. Economic activities open to the public
Explanation: The public sector consists of economic activities undertaken or controlled by government to provide services and promote public welfare.
Correct answer: Economic activities in which the government engages for the public good- A. many witnesses lie
- B. it is a cruel way to end someone's life
- C. sometimes an innocent person is put to death
- D. only God has the right to kill
Explanation: The strongest objection is that execution is irreversible, so a wrongful conviction can permanently kill an innocent person with no…
Correct answer: sometimes an innocent person is put to death- A. it prevents capital crime
- B. it acts as a deterrent
- C. societies need to threaten prospective criminals
- D. it protects the Biblical commandment against killing
Explanation: The principal justification offered for capital punishment is deterrence, meaning the threat of execution is expected to discourage…
Correct answer: it acts as a deterrent- A. copyright infringement
- B. data rape
- C. price fixing
- D. all but B
Explanation: Copyright infringement and price fixing are typically nonviolent offences, whereas the question excludes option B through “all but B.”…
Correct answer: all but B- A. Premeditated murder
- B. Rape
- C. Public drunkenness
- D. Burglary
Explanation: Public drunkenness is a social-order offence because it violates public norms and disrupts communal order without necessarily targeting a…
Correct answer: Public drunkenness- A. the increasing poverty of individual states
- B. government intervention in the economy
- C. the political apathy of public
- D. the willingness of individuals to give up traditional freedoms
Explanation: Government intervention expands the scope and functions of the state, often leading to growth in government size and activity.
Correct answer: government intervention in the economy- A. no flexibility
- B. no provision for public goods
- C. no profit motives
- D. responsiveness to demand
Explanation: Laissez-faire relies on private markets and therefore does not adequately provide public goods, whose benefits are difficult to restrict…
Correct answer: no provision for public goods- A. doubled since 1974
- B. tripled since 1074
- C. quadrupled since 1974
- D. increased nearly sevenfold since 1974
Explanation: The number of political action committees increased to nearly seven times its 1974 level, reflecting the growth of organized political…
Correct answer: increased nearly sevenfold since 1974- A. is rejected by the two main parties
- B. is integrated into the platforms of the two main parties
- C. is declared unconstitutional
- D. becomes a social movement
Explanation: A significant third party can pressure the two major parties by introducing popular issues or policies, which the major parties may then…
Correct answer: is integrated into the platforms of the two main parties- A. realignment
- B. dealignment
- C. alignment
- D. derailment
Explanation: A realignment is a major shift in the regular support of voters between political parties, often involving a transition from one party's…
Correct answer: realignment- A. split ticket voting
- B. huge political gaffes
- C. loss of direct contact with the electorate
- D. running the wrong candidates
Explanation: The usual explanation in this political-analysis context is that the Democrats selected candidates who were poorly matched to the national…
Correct answer: running the wrong candidates- A. PACs to Congress
- B. heterogeneous groups to coalitions
- C. extremists to government
- D. all of the above
Explanation: Political parties bring people and organizations with different interests together into broader electoral coalitions.
Correct answer: heterogeneous groups to coalitions- A. taking tactical advantage of trends and opportunities
- B. marketing skills
- C. procedures for succession
- D. all of the above
Explanation: Effective movement leaders exploit favourable trends, communicate and market the cause, and establish succession arrangements so the…
Correct answer: all of the above- A. The National Rifle Association
- B. The American Association of Retired people
- C. Lobbyists of America
- D. The Southern Christian Leadership Conference
Explanation: The NRA, AARP, and Southern Christian Leadership Conference are recognized organizations that seek to influence public affairs or policy.
Correct answer: Lobbyists of America- A. elite members identify with middle-class values
- B. the masses can on occasion influence the elite
- C. elites vary in their degree of openness
- D. all of the above
Explanation: The modified elitist view allows some interaction between elites and the wider population: elites may hold middle-class values, masses may…
Correct answer: all of the above- A. Front men
- B. Statesmen
- C. Shills or decoys
- D. Power and interest brokers
Explanation: Pluralists see politics as bargaining among competing interests, so politicians act as brokers who reconcile and negotiate among power…
Correct answer: Power and interest brokers