FISCAL POLICY OF PAKISTAN MCQs

Taxes are levied to:

A. Penalise people

b. Provide direct benefits to taxpayers

C.Provide general benefits for the people  (Answer)

d. To accumulate funds


Whom of the following propounded

principles of taxation:

A. Keynes b. Marshall

C. Adam Smith      (Answer)

d.: Al Ghazali


Taxes on commodities are:

A. Direct taxes

b. Indirect taxes     (Answer)

C. Progressive taxes

d. Proportional taxes


Govt. prepares its budget:

A. Weekly

b. Monthly

c. Quarterly

d. Annually      (Answer)


One of the following is NOT a feature of private finance:

A. Balancing of income and expenditure

b. Secrecy

C. Saving some part of income

d. Publicity     (Answer)


One of the following is NOT a feature of

private finance:

A. Publicity

b. Secrecy     (Answer)

C. Efforts to balance income and expenditure

d. Taking steps to increase income


It is direct tax:

A. Excise tax

b. Sales tax

C. Income tax     (Answer)

d. Custom duty


These are heads of expenditure of the government EXCEPT?

A. Provide social services

b. Defence

c. Improve transport communication

d. Provide cosmetics     (Answer)


The most important source of income of

a government is:

a. Foreign loans

b. Taxes     (Answer)

c. Printing of new money

d. Sale of government property


Progressive taxes:

a. Increase government revenue

b. Bring equality in distribution of incomes

c. Act as penalty for rich people

d. Both (a) & (b)     (Answer)


These are principles of taxation:

A. Principle of equality

b. Principle of certainty

c. Principle of secrecy

d. Both (a) & (b)     (Answer)


In Pakistan, taxes are levied by:

A. Prime minister of Pakistan

b. President of Pakistan

c. Federal cabinet of ministers

d. National assembly.     (Answer)


Which of the following tax is best example of ability to pay principle of taxes:

a. Excise tax on cigarettes

b. Highway toll tax

c. Proportional sales tax

d. Personal income tax     (Answer)


Govt. taxing and spending policies are called:

a. Monetary policy

b. Fiscal policy     (Answer)

C. Commercial policy    (Answer)

d. Finance policy


Govt. budget is balanced when:

a. Govt. expenditure outstrips tax receipts

b. Govt. tax receipts outstrips expenditure

c. Government expenditure equals tax revenue     (Answer)

d. None of the above


Government finance is called:

a. National finance

b. Public finance     (Answer)

c.Private finance

d. (a) and (b) of above


How the government can meet its expenditure:

a. By taxing people

b. By borrowing from banks and other governments

c. By printing new money

d. By all the three methods     (Answer)


The government can collect funds from

a. Taxes.

b. Fees

c. Prices of public goods

d. All the three     (Answer)


A direct tax is that which:

a. Is heavy burden on the tax payers

b. Can be directly deposited in the banks

c. Can not be evaded

d. Is paid by the person on whom it is levied     (Answer)


In Pakistan government budget is prepared by:

a. National Assembly

b. President of Pakistan

c. Ministry of Finance     (Answer)

d. State Bank of Pakistan.


In Pakistan Income tax is:

a. Progressive tax

b. Proportional op 2.

c. Direct

d. (a) and (b) of above     (Answer)


Which tax better conforms to the principle of equality in taxation

a. Progressive tax     (Answer)

b. Regressive tax

c. Proportional tax

d. Fixed tax


Which one is not a principle of taxation

a. Principle of equality

b. Principle of certainty

c. Principle of morality     (Answer)

d. Principle of diversity


A country has proportional system of taxation. A person pays Rs 500 tax when his income is 5000, how much tax he will pay if his earning rises to 8000:

a. 200

b. 400

c. 600

d 800     (Answer)


Which source a private company cannot use?

a. A bank loan

b. A bank overdraft as new shares in stock

c. Selling exchange

d. Deficit finance (new money)     (Answer)


Net taxes are:

a.Domestic taxes minus foreign taxes

b. Business taxes minus personal taxes

c. Total taxes minus govt transfer payments     (Answer)

d. Total taxes minus govt. purchases


Which is not counted as public expenditure?

a. Subsidy given to local city bus service

b. Defence expenditure

c. Investment spending by public companies     (Answer)

d. Interest payment on national debt.


If Income tax is assessed as Rs. 100 on an income of Rs. 1000. Compared to this, which one of the following indictes that the income tax rate is progressive?

a.Rs. 150 tax on Rs. 2000 income

b. Rs. 350 tax on Rs. 3000 income     (Answer)

c.Rs. 400 tax on Rs. 4000 income

d. Rs. 450 tax on Rs. 5000 income


The most important source of income of a government is

a. Foreign loans

b. Sprinting of new money

c. Sale of government property

d. Taxes     (Answer)


Progressive taxes:

a. Increase government revenue

b. Bring equality in distribution of incomes

c. Compel rich people to be honest

d. (a) & (b) of above     (Answer)


This is NOT a principle of taxation

a. Principle of equality

b. Principle of certainty

c.Principle of secrecy     (Answer)

d. Principle of economy


This is principle of taxation

a. Principle of honesty

b. Principle of morality

c. Principle of secrecy

d. Principle of economy     (Answer)


In Pakistan, the authority to levy taxes lies with:

a.Prime minister of Pakistan

b. President of Pakistan

c.Federal cabinet of ministers

d. National assembly     (Answer)


This tax is a good example of ability to pay principle of taxes

a.Excise tax on cigarettes

b. Highway toll tax 85

c. Proportional sales tax

d. Personal income tax     (Answer)


Govt taxing and spending policies are called:

a. Monetary policy

b. Fiscal policy DO     (Answer)

C. Commercial policy

d. Finance policy


Govt. budget is balanced when:

a. Govt. expenditure is kept to the a minimum op

b. Govt. income consists of both tax and non-tax income

c. Government expenditure equals tax revenue     (Answer)

d. None of the above


Government finance is called:

a. National finance

b. Public finance     (Answer)

c. Official finance

d. (a) & (b) of above


Government can can meet meet its expenditure:

a. By taxing people

b. By printing new money

c. By borrowing from banks and foreign countries

d. By all the three methods     (Answer)


It is direct tax:

a. Property tax

b. Income tax

c. Import tax     (Answer)

d. All are indirect taxes


Salman Software Company paid import tax. Burden of tax will be on:

The imported

a. Importer b. Wholesaler

C.Last buyer     (Answer)

d. Retailer


If a person who is tax-payer can shift

the burden of tax to someone else, the

tax is called

a. Movable tax

b. Indirect tax     (Answer)

c. Transfer tax

d. Undesirable tax


The federal budget of Pakistan  includes:

a. Direct taxes and indirect taxes

b. Proportional and progressive taxes

C. Simple and difficult taxes

d. (a) & (b) of above     (Answer)


To bring equitable distribution of  income in the country taxes should be

a. Direct

b. Indirect     (Answer)

c. Proportional

d. Progressive


These are principles of taxation:

a. Equality and certainty     (Answer)

b. Certainty and morality

c. Flexibility and durability

d. Durability and rigidity


It is better way to finance the govt.

budget

a. By taxing people     (Answer)

b. By printing new money

C. By borrowing from banks

d. By fining people doing illegal

activities


Income tax in Pakistan is

a. Direct and progressive     (Answer)

b. Direct and proportional

C. Indirect and progressive

d. Indirect and proportional


In Pakistan, income tax is collected by

a. Local govt

b. Provincial govt.

C. Federal govt.     (Answer)

d. All governments


Sales tax in Pakistan is:

a. Direct and progressive

b. Direct and proportional

C. Indirect and progressive

d. Indirect and proportional     (Answer)


It is easy and convenient to pay

a. Direct tax

b. Indirect tax     (Answer)

c. Proportional tax

d. Progressive tax


It is difficult to evade:

a. Direct tax     (Answer)

b. Indirect

c. Proportional

d. Progressive tax


Zakat is not due on the gold owned by

a person who has less than:

a. 60 tolas

b. 30 tolas

c. 15 tolas

d. 75 tolas     (Answer)


Zakat can be spent for this purpose:

a. Payment of fee of a poor child     (Answer)

b. Performing Hajj

c. Help poor parents

d. All of the above


It is a source of revenue for the Local

overnment bodies:

A. Corporation tax

b. Value added tax

c. Excise tax

d. Property tax     (Answer)


Federal government transfers to provinces as their share in tax collection:

a. Less than 40%

b. More than 40% but less than 60%     (Answer)

c. More than 60%

d. More than 90%


Which tax is not shared between

central and provincial governments?

a. Excise tax

b. Sales tax

C. Custom duty,

d. Property tax     (Answer)


Which is provincial tax in Pakistan:

a. Excise tax

b. Sales tax

Import duty

d. Motors token tax     (Answer)


Tax is a payment:

a. Compulsory     (Answer)

b. Voluntary

c. Unnecessary

d. Temporary


The main source of revenue of federal

government is:

a. Property taxes

b. Token tax

C. Custom duties

d. Sales tax     (Answer)


In Pakistan government budget is prepared by:

a. National assembly

b. President of Pakistan

c. Ministry of Finance     (Answer)

d. State Bank of Pakistan


In Pakistan Income tax is:

a. Progressive tax

b. Proportional

С. Direct

d. (a) and (c) of above     (Answer)


The budget estimate prepared by ministry of finance is finally approved by:

a. State Bank

b. President

C. Senate

d. National Assembly     (Answer)


Government of Pakistan can increase its resources by

a. Taxing people

b. Printing new notes

c. Borrowing

d. All the three     (Answer)


The non-Muslims pay Zakat:

a. At a higher rate than Muslims

b. At a lower rate than Muslims

At the same rate

d. Do not pay Zakat     (Answer)


To contro! inflation the government should increase:

a. Budget deficit

b. Consumer spending

c. Income tax     (Answer)

d. Pensions


In past decades Pakistan increased its GDP, yet living standard of majority hasnot risen. The most important cause of this situation is:

a. Increased govt. expenditure

b. Increased imports

c. Increased education

d. Increased population     (Answer)


Which of the following should NOT be the aim of a government:

a. Economic growth

b. Full employment

C. Inequality of incomes     (Answer)

d. Price stability


Which of the following would cause incomes to become more unequal:

a. Increased employment

b. Increased unemployment allowance

c. More progressive taxes

d. More regressive taxes     (Answer)


What is the benefit of tariffs:

a. Increased choice

b. Increased government revenue     (Answer)

c. More competition

d. More trade


Pakistan’s public debt is:

a. Larger than GNP

b. Approximately equal to GNP

c. Smaller than GNP     (Answer)

d. Smaller than our exports


Pakistan’s fiscal year starts from:

a. 1st September

b. 1st January

c. 1st April

d. 1st July     (Answer)


The Federal budget is presented in the parliament by

a. Prime minister

b. President

c. Finance minister     (Answer)

d. Commerce minister


Pakistan’s Budget has parts:

a. Current and development

b. Revenue and expenditure

c. Development non-development

d. Both (a) and (b)      (Answer)


Federal government tax revenue collection includes:

a. Divisible taxes with provinces     (Answer)

b. Divisible taxes with district govt.

C. Non-tax revenue

d. All of the above


Which is true:

a. Federal govt collects taxes and shares with provinces     (Answer)

b. Provincial govt collects taxes and shares with federal govt.

c. Federal govt collects taxes and shares with local govts.

d. Local govts. Collects, taxes and shares with federal govt.


Which is true?

a. Federal govt has the right to collect tax.

b. Provincial govt has the right to collect taxes

c. Local govt has the right to collect taxes

d. All of the above is true


The most important body to collect taxes in Pakistan is:

a. District govts.

b. State Bank

c. Ministry of finance

d. FBR     (Answer)


Which is true about amount of taxes collected in Pakistan

a. Direct taxes are more than indirect taxes

b. Indirect taxes are more than direct taxes

c. Provincial taxes are more than federal     (Answer)

d. Provincial govts. Share taxes with federal govt.


Exemption limit for income tax in Pakistan is:

a. 10 lakh

b. 5 lakh.

c. 4 lakh     (Answer)

d. 1 lakh


Rate of General Sales Tax (GST) is:

a. 17%     (Answer)

b. More than 10% but less than 20%

c. More than 20% but less than 30%

d. More than 30% but less than 40%


40% of income of federal government is obtained from (check)

A. Income tax     (Answer)

b. Excise tax

c. Import tax

d. Property tax


Fiscal Policy is controlled by

a. The Federal Reserve Board

b Congress and the President     (Answer)

C. The Supreme Court

d. Private banks


The purpose of fiscal policy is to

a. Alter the direction of the economy     (Answer)

b. Change people’s attitudes toward government

c. Educate people as to the importance of economics

d. Offer insight into the way things work


Fiscal policy is purposeful movements in designed to direct an economy

a. Interest rates

b. Legal structures

C. Government regulations

D. Government spending and taxes     (Answer)


Discretionary Fiscal Policy differs from

Nondiscretionary Fiscal Policy in that

a. The former deals with interest rates and the latter deals with tax policy

b. The former is built into the system whereas the latter requires timely decisions

C. The former requires timely decisions whereas the latter is built into the  system     (Answer)

d. The former deals with tax policy and the latter deals with interest rates


Discretionary Fiscal Policy differs from Nondiscretionary Fiscal Policy in that

a. The former deals with government spending and the latter deals with tax policy

b. The former is chosen by Congress while the latter is chosen by the President

c. The former is always stabilizing, while the latter is never stabilizing

D. The former often takes years to enact, while the latter takes effect automatically     (Answer)


Replacement of a progressive income tax system with a single income tax rate would be an example of

a. Nondiscretionary fiscal policy

b. Discretionary fiscal policy     (Answer)

c. Mandatory spending policy

d. Interest rate policy


An example of discretionary fiscal policy would be

a. The operation of the welfare state

b. The operation of the progressive federal income tax

c. A tax cut adopted to stimulate consumption     (Answer)

d. An interest rate cut implemented to stimulate consumption


An example of discretionary fiscal policy would be increase

a. The operation of the welfare state

b. The operation of the progressive federal income tax

C. A tax increase adopted to control inflationary pressures     (Answer)

d. An interest rate implemented to control inflationary pressures


An example of discretionary fiscal policy would be

a. The existence of the welfare state

b. The existence of the progressive federal income tax

c. A federal jobs program adopted to stimulate consumption     (Answer)

d. an interest rate cut implemented to stimulate consumption


An example of nondiscretionary fiscal policy would be ICA

A. The operation of the welfare state     (Answer)

b. A federal jobs program adopted to stimulate consumption

C. A tax cut adopted to stimulate consumption

d. An interest rate cut implemented to stimulate consumption


An example of nondiscretionary fiscal policy would be

a. The existence of the progressive federal income tax levs     (Answer)

b. A federal jobs program adopted to stimulate consumption

c. A tax cut adopted to stimulate consumption but los

d. An interest rate cut implemented to stimulate consumption


Nondiscretionary Fiscal Policy works by having

a. Progressive income tax rates take a portion of increased incomevthereby dampening periods of growth

b. Congress and the President agree upon a tax cut to stimulate growth

c. Welfare programs reduce spending on people when they increased incomes dampening periods of economic growth

d. A and C     (Answer)


Nondiscretionary Fiscal Policy works by having

a. Progressive income tax rates take a smaller portion of decreased income thereby cushioning periods of contraction

b. Congress and the President agree upon a tax cut to stimulate growth

c. Welfare programs increase spending on people when they have decreased incomes thereby cushioning periods of contraction

d. A and C     (Answer)


If you were to use an Aggregate Supply Aggregate Demand diagram to model nondiscretionary and discretionary fiscal policy in reaction to a negative aggregate demand shock, you would see

a. The aggregate demand curve move to the right as a result of the shock

b. The aggregate demand curve move to the left as a result of the shock

C. The aggregate demand demand curve move back toward its pre-shock position as a result of these policies

d. B and C     (Answer)


If you were to use an Aggregate Supply Aggregate Demand diagram to model nondiscretionary and discretionary fiscal policy in reaction to a positiv aggregate demand shock, you would see

a. The aggregate demand curve move to the right as a result of th shock

b. The aggregate demand curve move to the left as a result of the shock

c. The aggregate demand demand curve move back toward its pre-shock position as a result of these policies

d. Both B and C     (Answer)


Which of the following would qualify as an aggregate supply shock?

a. An unexpected increase in oil prices   (Answer)

b. seasonally expected increase in oil prices

C. An unexpected reduction consumer confidence

d. An anticipated tax cut


Which of the following would qualify as an aggregate supply shock?

a. An unexpected decrease in oil prices

b. A seasonally expected decrease is oil prices

c. An unexpected surge in consumer confidence     (Answer)

d. An anticipated tax cut


Which of the following would qualify as an aggregate demand shock?

a. An unexpected increase in oil prices

b. A seasonally expected increase in oil prices

C. An unexpected reduction consumer confidence

d. An anticipated tax cut     (Answer)


The mistiming problem with discretionary fiscal policy results from

a. A delay in recognizing a recession

b. A delay in agreeing on a solution to a recession     (Answer)

c. A delay in getting a particular plan non implemented with the money getting into peoples’ hands

d. All of the above Rss


Which of the following would be described as the administrative lag?

a. The time required to know that there is a recession     (Answer)

b. The time required to agree upon a policy remedy for a recession

C. The time required to get particular plan implemented with the money put into peoples’ hands

d. The time required to get the people to spend the money returned to them through tax cuts


Which of the following would be described as the recognition lag?

a. The time required to know that there is a recession

b The time required to agree upon a policy remedy for a recession

c. The time required to to get a particular plan implemented with the money getting into peoples’ hands     (Answer)

d. The time required by a President to sign legislation


Which of the following would be described as the operational lag?

a. The time required to know that there is a recession

b. The time required to agree upon a policy remedy for a recession

c. The time required to get a particular plan implemented with the money getting into peoples’ hands     (Answer)

d. Both A and B


A political problem with discretionary fiscal policy is the

a. Contractionary bias     (Answer)

b. Big-state bias

C. Expansionary bias

d. Overreaction bias


A political problem with discretionary fiscal policy is the

a. Political business cycle(Answer)

b. Split control of the legislative and judicial branches of government

c. Business cycle

d. Federal Reserve


Generally speaking the last two years of a President’s term are associated with

a. Higher growth than the first two years  (Answer)

b. The same growth as the first two years

c. Lower growth than the first two years

d Higher unemployment than the first two years

   
error: Content is protected !!
error: Alert: Content is protected !!