Correct Answer:
A. Tax rates and tax revenue
It suggests that beyond some rate, higher tax rates may reduce revenue.
November 13, 2026 · Accounting and Finance MCQs, Public Finance & Budgeting MCQs
The Laffer curve shows the relationship between:
Related MCQs
The ability-to-pay principle of taxation says that:
A.
People should pay tax according to benefits received
B.
Everyone pays the same amount
C.
People with higher income or wealth should pay more tax
D.
Only businesses pay tax
Correct answer is:
C. People with higher income or wealth should pay more tax
Do you agree with this answer?
A stock split:
A.
Reduces the number of shares
B.
Raises new capital
C.
Distributes cash to shareholders
D.
Increases the number of shares and reduces the price per share without changing total equity
Correct answer is:
D. Increases the number of shares and reduces the price per share without changing total equity
Do you agree with this answer?
An accrued expense is an expense that has been:
A.
Paid in advance
B.
Paid and recorded as an asset
C.
Neither incurred nor paid
D.
Incurred but not yet paid, shown as a liability
Correct answer is:
D. Incurred but not yet paid, shown as a liability
Do you agree with this answer?
Which of the following is an example of a public sector fraud risk indicator?
A.
Payments approved with full documentation
B.
Competitive bidding with several bidders
C.
Payments split into smaller amounts to avoid approval limits
D.
Regular stock verification
Correct answer is:
C. Payments split into smaller amounts to avoid approval limits
Do you agree with this answer?
Under the cash basis of accounting, transactions are recognized when:
A.
They are earned or incurred
B.
Cash is received or paid
C.
They are budgeted
D.
They are audited
Correct answer is:
B. Cash is received or paid
Do you agree with this answer?
EBIT is Rs. 200,000 and interest is Rs. 50,000. The degree of financial leverage is approximately:
A.
4.0
B.
0.75
C.
1.33
D.
1.25
Correct answer is:
C. 1.33
Do you agree with this answer?
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