Objectives of Public Finance - SS2 Economics Past Questions & Answers - page 1

1

What are the objectives of public finance?

A

Allocative efficiency, economic growth, income distribution, price stability, and fiscal stability.

B

Business growth, income generation, price regulation, and financial stability.

C

Personal income, financial growth, business regulation, and price control.

CORRECT OPTION: a
2

How can public finance promote economic growth?

A

By investing in infrastructure projects.

B

By providing tax incentives for businesses.

C

By creating employment opportunities.

 

D

All of the above.

CORRECT OPTION: d
3

What is the objective of income distribution in public finance?

A

To promote a more equitable distribution of income.

B

To promote the growth of businesses.

C

To promote personal income. 

CORRECT OPTION: a
4

What is price stability in public finance?

A

The ability of the government to regulate prices.

B

The ability of the government to manage inflation and regulate demand in the economy.

C

The ability of the government to control taxes and spending.

CORRECT OPTION: b
5

What is fiscal stability in public finance?

A

The ability of the government to maintain a balanced budget.

B

The ability of the government to invest in public goods.

C

The ability of the government to regulate prices.

CORRECT OPTION: a
6

Name two objectives of public finance.

Two objectives of public finance are:

  • Income Distribution: Public finance can be used to promote a more equitable distribution of income by providing social welfare programs and targeted tax policies that benefit lower-income households.

  • Price Stability: Governments can use fiscal policy to manage inflation and price stability, by adjusting taxes and spending to regulate demand in the economy.

7

How can public finance promote income distribution?

 

By providing social welfare programs and targeted tax policies that benefit lower-income households.

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