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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) Using a graph, briefly describe the ā€œPrinciple of Maximum Social Advantageā€ (6marks)
b) Taxation is deemed the major source of a government revenue. Using the Kenyan government as a n example, briefly outline the objectives of taxation. (7marks)
c) What is taxable capacity? Briefly outline any 5 (five) factors that determine taxable capacity (10marks)
d) Public expenditure includes the expenses which a government incurs for its own maintenance, the society and economy and helping other countries. What are the principles that govern these decisions? (7marks)

Question 2
a) When the government expenditure exceeds its receipts, it borrows from the public. Briefly outline the various types of public debt in a country like Kenya. (10marks)
b) Using relevant examples, explain methods the government incurs for its own maintenance, the society and economy and helping other countries. What are the principles that govern these decisions? (7marks)

Question 3
a) Distinguish between Public and Private finance (5marks)
b) Using relevant examples in Kenya show the importance of government intervention in the economy (15marks)

Question 4
Write short notes on the following;
a) Free rider problem
b) Direct and Indirect taxes
c) Principles of a good budget
d) Incidence Vs Effects Taxation (20marks)






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