List-A and List-B show names of Musgrave's three types of incidence of tax and their meaning…
Matching Richard Musgrave's three concepts of incidence: A. Specific incidence – F (tax changed with no change in government expenditure); B. Differential incidence – E (one…
Choose your answer
List-A and List-B show names of Musgrave's three types of incidence of tax and their meaning respectively :
| List-A | List-B |
|---|---|
| A. Specific incidence | D. Government increases its expenditure by the yield of tax. |
| B. Differential incidence | E. A tax is levied as a substitute of another tax. |
| C. Balanced budget incidence | F. Tax is imposed without any change in the expenditure of government. |
Choose the correct match of List-A and List-B :
Answer and explanation
Correct answer A
Matching Richard Musgrave's three concepts of incidence: A. Specific incidence – F (tax changed with no change in government expenditure); B. Differential incidence – E (one tax substituted for another holding real expenditure constant); C. Balanced-budget incidence – D (government expenditure increased by the tax yield).
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RPSC Assistant Professor (College Education)