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Public Finance Questions and Answers | Public Finance MCQs

(1) These are principles of taxation:
[A] Principle of equality
[B] Principle of certainty
[C] Principle of secrecy
[D] Both (a) & (b)
Answer: Both (a) & (b)
(2) In Pakistan, taxes are levied by:
[A] Prime minister of Pakistan
[B] President of Pakistan
[C] Federal cabinet of ministers
[D] National assembly
Answer: National assembly

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(3) 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: Personal income tax
(4) Govt. taxing and spending policies are called:
[A] Monetary policy
[B] Fiscal policy
[C] Commercial policy
[D] Finance policy
Answer: Fiscal policy
(5) Govt. budget is balanced when:
[A] Govt. expenditure outstrips tax receipts
[B] Govt. tax receipts outstrips expenditure
[C] Government expenditure equals tax revenue
[D] None of the above
Answer: Government expenditure equals tax revenue
(6) Government finance is called:

[A] National finance
[B] Public finance
[C] Private finance
[D] (a) and (b) of above
Answer: Public finance
(7) 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: By all the three methods
(8) The government can collect funds from:
[A] Taxes
[B] Fees
[C] Prices of public goods
[D] All the three
Answer: All the three
(9) 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: Is paid by the person on whom it is levied
(10) In Pakistan government budget is prepared by:
[A] National Assembly
[B] President of Pakistan
[C] Ministry of Finance
[D] State Bank of Pakistan
Answer: Ministry of Finance

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