Public Finance Objective Questions and Answers | Public Finance MCQs

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Questions
1 In Pakistan Income tax is:
A Progressive tax
B Proportional
C Direct
D (a) and (b) of above

Answer: (a) and (b) of above
2 Which tax better conforms to the principle of equality in taxation
A Progressive tax
B Regressive tax
C Proportional tax
D Fixed tax

Answer: Progressive tax
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3 Which one is not a principle of taxation:
A Principle of equality
B Principle of certainty
C Principle of morality
D Principle of diversity

Answer:Principle of morality
4 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:800
5 Which source a private company cannot use?
A A bank loan
B A bank overdrafte
C Selling new shares in stock exchangee
D Deficit finance (new money)

Answer:Deficit finance (new money)
6 Net taxes are:

A Domestic taxes minus foreign taxes
B Business taxes minus personal taxes
C Total taxes minus govt. transfer payments
D Total taxes minus govt. purchases

Answer: Total taxes minus govt. transfer payments
7 Which is not counted as public expenditure?
A Subsidy given to local city bus service
B Defence expenditure
C Investment spending by public companies
D Interest payment on national debt.

Answer: Investment spending by public companies
8 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
C Rs. 400 tax on Rs. 4000 income
D Rs. 450 tax on Rs. 5000 income

Answer:Rs. 350 tax on Rs. 3000 income
9 The most important source of income of a government is:
A Foreign loans
B Sprinting of new money
C Sale of government property
D Taxesd

Answer:Taxesd
10 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:(a) & (b) of above
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