laboursonline – MCQs, Mock Tests | Economics Economics Public Finance

Taxes are levied to:

1. Penalise people
2. Provide direct benefits to tax payers
3. Provide general benefits for the people
4. To accumulate funds

✅ Correct Answer: 3

Whom of the following propounded principles of taxation:

1. Keynes
2. Marshall
3. Adam Smith
4. Al Ghazali

✅ Correct Answer: 3

Taxes on commodities are:

1. Direct taxes
2. Indirect taxes
3. Progressive taxes
4. Proportional taxes

✅ Correct Answer: 2

Govt. prepares its budget:

1. Weekly
2. Monthly
3. Quarterly
4. Annually

✅ Correct Answer: 4

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

1. Balancing of income and expenditure
2. Secrecy
3. Saving some part of income
4. Publicity

✅ Correct Answer: 4

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

1. Publicity
2. Secrecy
3. Efforts to balance income and expenditure
4. Taking steps to increase income

✅ Correct Answer: 2

It is direct tax:

1. Excise tax
2. Sales tax
3. Income tax
4. Custom duty

✅ Correct Answer: 3

These are heads of expenditure of the government EXCEPT?

1. Provide social services
2. Defence
3. Improve transport and communication
4. Provide cosmetics

✅ Correct Answer: 4

The most important source of income of a government is:

1. Foreign loans
2. Taxes
3. Printing of new money
4. Sale of government property

✅ Correct Answer: 2

Progressive taxes:

1. Increase government revenue
2. Bring equality in distribution of incomes
3. Act as penalty for rich people
4. Both (a) & (b)

✅ Correct Answer: 4

These are principles of taxation:

1. Principle of equality
2. Principle of certainty
3. Principle of secrecy
4. Both (a) & (b)

✅ Correct Answer: 4

In Pakistan taxes are levied by:

1. Prime minister of Pakistan
2. President of Pakistan
3. Federal cabinet of ministers
4. National assembly

✅ Correct Answer: 4

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

1. Excise tax on cigarettes
2. Highway toll tax
3. Proportional sales tax
4. Personal income tax

✅ Correct Answer: 4

Govt. taxing and spending policies are called:

1. Monetary policy
2. Fiscal policy
3. Commercial policy
4. Finance policy

✅ Correct Answer: 2

Govt. budget is balanced when:

1. Govt. expenditure outstrips tax receipts
2. Govt. tax receipts outstrips expenditure
3. Government expenditure equals tax revenue
4. None of the above

✅ Correct Answer: 3

Government finance is called:

1. National finance
2. Public finance
3. Private finance
4. (a) and (b) of above

✅ Correct Answer: 2

How the government can meet its expenditure:

1. By taxing people
2. By borrowing from banks and other governments
3. By printing new money
4. By all the three methods

✅ Correct Answer: 4

The government can collect funds from:

1. Taxes
2. Fees
3. Prices of public goods
4. All the three

✅ Correct Answer: 4

A direct tax is that which:

1. Is heavy burden on the tax payers
2. Can be directly deposited in the banks
3. Can not be evaded
4. Is paid by the person on whom it is levied

✅ Correct Answer: 4

In Pakistan government budget is prepared by:

1. National Assembly
2. President of Pakistan
3. Ministry of Finance
4. State Bank of Pakistan

✅ Correct Answer: 3

In Pakistan Income tax is:

1. Progressive tax
2. Proportional
3. Direct
4. (a) and (b) of above

✅ Correct Answer: 4

Which tax better conforms to the principle of equality in taxation

1. Progressive tax
2. Regressive tax
3. Proportional tax
4. Fixed tax

✅ Correct Answer: 1

Which one is not a principle of taxation:

1. Principle of equality
2. Principle of certainty
3. Principle of morality
4. Principle of diversity

✅ Correct Answer: 3

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:

1. 200
2. 400
3. 600
4. 800

✅ Correct Answer: 4

Which source a private company cannot use?

1. A bank loan
2. A bank overdraft
3. Selling new shares in stock exchange
4. Deficit finance (new money)

✅ Correct Answer: 4

Net taxes are:

1. Domestic taxes minus foreign taxes
2. Business taxes minus personal taxes
3. Total taxes minus govt. transfer payments
4. Total taxes minus govt. purchases

✅ Correct Answer: 3

Which is not counted as public expenditure?

1. Subsidy given to local city bus service
2. Defence expenditure
3. Investment spending by public companies
4. Interest payment on national debt.

✅ Correct Answer: 3

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?

1. Rs. 150 tax on Rs. 2000 income
2. Rs. 350 tax on Rs. 3000 income
3. Rs. 400 tax on Rs. 4000 income
4. Rs. 450 tax on Rs. 5000 income

✅ Correct Answer: 2

The most important source of income of a government is:

1. Foreign loans
2. Sprinting of new money
3. Sale of government property
4. Taxes

✅ Correct Answer: 4

Progressive taxes:

1. Increase government revenue
2. Bring equality in distribution of incomes
3. Compel rich people to be honest
4. (a) & (b) of above

✅ Correct Answer: 4

This is NOT a principle of taxation:

1. Principle of equality
2. Principle of certainty
3. Principle of secrecy
4. Principle of economy

✅ Correct Answer: 3

This is principle of taxation

1. Principle of honesty
2. Principle of morality
3. Principle of secrecy
4. Principle of economy

✅ Correct Answer: 4

In Pakistan the authority to levy taxes lies with:

1. Prime minister of Pakistan
2. President of Pakistan
3. Federal cabinet of ministers
4. National assembly

✅ Correct Answer: 4

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

1. Excise tax on cigarettes
2. Highway toll tax
3. Proportional sales tax
4. Personal income tax

✅ Correct Answer: 4

Govt. taxing and spending policies are called:

1. Monetary policy
2. Fiscal policy
3. Commercial policy
4. Finance policy

✅ Correct Answer: 2

Govt. budget is balanced when:

1. Govt. expenditure is kept to the minimum
2. Govt. income consists of both tax and non-tax income
3. Government expenditure equals tax revenue
4. None of the above

✅ Correct Answer: 3

Government finance is called:

1. National finance
2. Public finance
3. Official finance
4. (a) & (b) of above

✅ Correct Answer: 2

The government can meet its expenditure:

1. By taxing people
2. By printing new money
3. By borrowing from banks and foreign countries
4. By all the three methods

✅ Correct Answer: 4

It is direct tax:

1. Property tax
2. Income tax
3. Import tax
4. All are indirect taxes

✅ Correct Answer: 3

Mansoor Software Co imported computers and paid import tax. Burden of tax will be on:

1. Importer
2. Wholesaler
3. Last buyer
4. Retailer

✅ Correct Answer: 3

If a person who is tax-payer can shift the burden of tax to someone else the tax is called:

1. Movable tax
2. Indirect tax
3. Transfer tax
4. Undesirable tax

✅ Correct Answer: 2

The federal budget of Pakistan includes:

1. Direct taxes and indirect taxes
2. Proportional and progressive taxes
3. Simple and difficult taxes
4. (a) & (b) of above

✅ Correct Answer: 4

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

1. Direct
2. Indirect
3. Proportional
4. Progressive

✅ Correct Answer: 4

These are principles of taxation:

1. Equality and certainty
2. Certainty and morality
3. Flexibility and durability
4. Durability and rigidity

✅ Correct Answer: 1

It is better way to finance the govt. budget:

1. By taxing people
2. By printing new money
3. By borrowing from banks
4. By fining people doing illegal activities

✅ Correct Answer: 1

Income tax in Pakistan is:

1. Direct and progressive
2. Direct and proportional
3. Indirect and progressive
4. Indirect and proportional

✅ Correct Answer: 1

In Pakistan income tax is collected by:

1. Local govt
2. Provincial govt
3. Federal govt.
4. All governments

✅ Correct Answer: 3

Sales tax in Pakistan is:

1. Direct and progressive
2. Direct and proportional
3. Indirect and progressive
4. Indirect and proportional

✅ Correct Answer: 4

It is easy and convenient to pay:

1. Direct tax
2. Indirect tax
3. Proportional tax
4. Progressive tax

✅ Correct Answer: 2

It is difficult to evade:

1. Direct tax
2. Indirect
3. Proportional
4. Progressive tax

✅ Correct Answer: 1

Zakat is not due on the gold owned by a person who has less than:

1. 60 tolas
2. 30 tolas
3. 15 tolas
4. 7.5 tolas

✅ Correct Answer: 4

Zakat can be spent for this purpose:

1. Payment of fee of a poor child
2. Performing Hajj
3. Help poor parents
4. All of the above

✅ Correct Answer: 1

It is a source of revenue for the Local overnment bodies:

1. Corporation tax
2. Value added tax
3. Excise tax
4. Property tax

✅ Correct Answer: 4

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

1. Less than 40%
2. More than 40% but less than 60%
3. More than 60%
4. More than 90%

✅ Correct Answer: 2

Which tax is not shared between central and provincial governments?

1. Excise tax
2. Sales tax
3. Custom duty
4. Property tax

✅ Correct Answer: 4

Which is provincial tax in Pakistan:

1. Excise tax
2. Sales tax
3. Import duty
4. Motors token tax

✅ Correct Answer: 4

Tax is a payment:

1. Compulsory
2. Voluntary
3. Unnecessary
4. Temporary

✅ Correct Answer: 1

The main source of revenue of federal government is:

1. Property taxes
2. Token tax
3. Custom duties
4. Sales tax

✅ Correct Answer: 4

In Pakistan Income tax is:

1. Progressive tax
2. Proportional
3. Direct
4. (a) and (c) of above

✅ Correct Answer: 4

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

1. State Bank
2. President
3. Senate
4. National Assembly

✅ Correct Answer: 4

Federal govt. budget estimate for 2010-11 is:

1. 2800 million
2. 2800 billion
3. 2800 trillion
4. Bigger than 2800 trillion

✅ Correct Answer: 2

Government of Pakistan can increase its resources by:

1. Taxing people
2. Printing new notes
3. Borrowing
4. All the three

✅ Correct Answer: 4

The non-Muslims pay Zakat:

1. At a higher rate than Muslims
2. At a lower rate than Muslims
3. At the same rate
4. Do not pay Zakat

✅ Correct Answer: 4

To control inflation the government should increase:

1. Budget deficit
2. Consumer spending
3. Income tax
4. Pensions

✅ Correct Answer: 3

In past decades Pakistan increased its GDP yet living standard of majority has not risen. The most important cause of this situation is:

1. Increased govt. expenditure
2. Increased imports
3. Increased education
4. Increased population

✅ Correct Answer: 4

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

1. Economic growth
2. Full employment
3. Inequality of incomes
4. Price stability

✅ Correct Answer: 3

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

1. Increased employment
2. Increased unemployment allowance
3. More progressive taxes
4. More regressive taxes

✅ Correct Answer: 4

What is the benefit of tariffs:

1. Increased choice
2. Increased government revenue
3. More competition
4. More trade

✅ Correct Answer: 2

Pakistan s public debt is:

1. Larger than GNP
2. Approximately equal to GNP
3. Smaller than GNP
4. Smaller than our exports

✅ Correct Answer: 3

Pakistan s fiscal year starts from:

1. 1st September
2. 1st January
3. 1st April
4. 1st July

✅ Correct Answer: 4

The Federal budget is presented in the parliament by:

1. Prime minister
2. President
3. Finance minister
4. Commerce minister

✅ Correct Answer: 3

Pakistan s Budget has parts:

1. Current and development
2. Revenue and expenditure
3. Development and non-development
4. Both (a) and (b)

✅ Correct Answer: 4

Federal government tax revenue collection includes:

1. Divisible taxes with provinces
2. Divisible taxes with district govt.
3. Non-tax revenue
4. All of the above

✅ Correct Answer: 1

Which is true:

1. Federal govt. collects taxes and shares with provinces
2. Provincial govt. collects taxes and shares with federal govt.
3. Federal govt. collects taxes and shares with local govts.
4. Local govts. Collects taxes and shares with federal govt.

✅ Correct Answer: 1

Which is true?

1. Federal govt. has the right to collect taxes
2. Provincial govt. has the right to collect taxes
3. Local govt. has the right to collect taxes
4. All of the above is true

✅ Correct Answer: 4

The most important body to collect taxes in Pakistan is:

1. District govts.
2. State Bank
3. Ministry of finance
4. FBR

✅ Correct Answer: 4

According to total amount collected the taxes fall in this order:

1. Custom excise sales
2. Sales custom excise
3. Custom sales excise
4. Excise sales custom

✅ Correct Answer: 2

According to total amount collected the taxes fall in this order:

1. Custom sales tax income tax
2. Custom income tax sales tax
3. Income tax custom sales tax
4. Sales tax custom excise

✅ Correct Answer: 4

Which is true about amount of taxes collected in Pakistan:

1. Direct taxes are more than indirect taxes
2. Indirect taxes are more than direct taxes
3. Provincial taxes are more than federal
4. Provincial govts. Share taxes with federal govt.

✅ Correct Answer: 2

Exemption limit for income tax in Pakistan is:

1. 10 lakh
2. 5 lakh
3. 3 lakh
4. 1 lakh

✅ Correct Answer: 3

Rate of General Sales Tax (GST) is:

1. Less than 10%
2. More than 10% but less than 20%
3. More than 20% but less than 30%
4. More than 30% but less than 40%

✅ Correct Answer: 2

40% of income of federal government is obtained from:

1. Income tax
2. Excise tax
3. Import tax
4. Property tax

✅ Correct Answer: 1

Pakistan s expenditure on defence is:

1. 10% of federal budget
2. More than 10% but less than 25%
3. More than 25% but less than 35%
4. More than 35% but less than 45%

✅ Correct Answer: 2