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Public Finance(Buss 346) Question Paper

Public Finance(Buss 346) 

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2010



TIME : 2 HOURS

Instructions: Answer Question one and any other TWO questions

QUESTION 1
a)i) Distinguish clearly between the impact of tax and the incidence of tax. (4marks)
ii) Explain the importance of tax incidence to the taxing authority. (4marks)
b) i) Using relevant examples, explain what is tax shifting. (2marks)
ii) Discuss any three theories of tax shifting. (6marks)
c) i) State and explain three factors that govern taxable capacity. (6marks)
ii) How does elasticity of demand influence the incidence of sales tax on a good? (8marks)

QUESTION 2
a) State and explain the Wiseman-peacock hypothesis of increasing public expenditure. (6marks)
b) Briefly, discuss how public debt can be used to regulate the economy. (8marks)
c) Examine the effects of public expenditure on employment in developing countries. (6marks)

QUESTION 3
a) Explain the rationale for government operating under a budget deficit and at the same time experiencing a positive economic growth. (6marks)
b) Discuss the role of balanced budget in achieving economic stability in a Country (6marks)
c) Explain how the government made provision in the 2010/2011 budget to cater for the current economic conditioning Kenya (8marks)

QUESTION 4
a) Explain the effect of public expenditure on employment, price control in a developing country like Kenya. (10marks)
b) Explain five canon of tax. (10marks)






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