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Buss 346: Public Finance Question Paper

Buss 346: Public Finance

Course:Public Finance

Institution: Kenya Methodist University question papers

Exam Year:2008

KENYA METHODIST UNIVERSITY

END OF SECOND TRIMESTER 2008 EXAMINATIONS

FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTEMENT : BUSINESS ADMINISTRATION
COURSE CODE : BUSS 346
COURSE TITLE : PUBLIC FINANCE
TIME : 2 HOURS

INSTRUCTIONS:
• Answer Question ONE (Compulsory) and any other TWO Questions

Question 1
(a) Explain the meaning of the following terms used in public Finance
(i) Public Finance
(ii) Impact and Incidence of Tax
(iii) Public Debt
(iv) Budgeting
(v) Similarities between public Finance and Private Finance (15 marks)

(b) Briefly Discuss Five differences between Private goods and Public goods. (10 marks)

Question 2
(a) Using a diagram explain the principle of maximum social advantage (5 marks)

(b) Highlight five limitations of the principle of maximum social advantage (10 marks)

(c) State and explain four externalities created through consumption of Public goods
(10 marks)
Question 3
(a) The component of public finance called Tax revenue is different from non-Tax revenue. Using relevant Kenyan examples discuss this statement. (5 marks)

(b) Identify five reasons why the Kenyan government imposes Tax on her Citizens
(10 marks)

(c) State five circumstances under which Taxation would be Unreliable source of income, to a government (10 marks)

Question 4
(a) The Kenya economic policy makers are intending to introduce new range of taxes. Advice them on Ten qualities of a good Tax system (10 marks)

(b) The direct Tax system has more harm than good. Discuss (15 marks)

Question Five
(a) For public expenditure to be incurred certain considerations are necessary. Enumerate Eight such considerations (15 marks)

(b) The government must identify and exploit several sources of income. Explain five factors the government considers before choosing sources of income (10 marks)

Question 6
(a) State and explain five types of public debts (10 marks)

(b) Explain five ways through which national Budgets promotes economic development (10 marks)

(c) Explain four techniques of public debt management that can be adopted by the Kenyan government (5 marks)

Buss 346: Public Finance Question Paper

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