LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034 B.A. DEGREE EXAMINATION – ECONOMICS
FIFTH SEMESTER – NOV 2006
EC 5503 – FISCAL ECONOMICS
(Also equivalent to ECO 508)
Date & Time : 01-11-2006/9.00-12.00 Dept. No. Max. : 100 Marks
Part – A
Answer any FIVE questions in about 75 words each. (5 x 4 = 20 marks)
- Distinguish between public finance and private finance?
- What is the effect of public expenditure on ability to work, save and invest?
- Distinguish between tax evasion and tax avoidance.
- Name the non-tax revenues of the Government of India.
- Differentiate between public debt and tax.
- What is meant by zero based budget?
- List out the canons of taxation.
Part – B
Answer any FOUR questions in about 300 words each. (4 x 10 = 40 marks)
- “Public finance is the study of principles underlying the spending and raising of funds by public authorities” – Explain.
- Describe the main characteristics of a good tax system.
- Explain the Wagner’s law of public expenditure. Do you think that the law operates in India? Substantiate your answer.
- What is the importance of income-tax as a source of revenue for Government of India? Can expenditure tax be replaced by income tax?
- Discuss the role of deficit financing in a developing economy like India.
- Critically examine the benefit theory of taxation.
- Elaborate the argument for and against corporation tax.
Part – C
Answer any TWO questions in about 900 words each. (2 x 20 = 40 marks)
- “Public finance must be based on principles of maximum social advantage” – Discuss.
- What are the various principles of taxation? State and explain the main difficulties in the way of practical application of these principles.
- Discuss the concept of taxable capacity. Explain the factors, which determine the taxable capacity of a community. How would you measure taxable capacity?
“If fiscal policy has to achieve the desired objectives of economic stability great care must be exercised with regard to its timing and size” – Discuss.