Objective Questions on Public Finance | Public Finance MCQs Quiz

1 In Pakistan Income tax is:

A Progressive tax

B Proportional

C Direct

D (a) and (b) of above

View Answer

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

View Answer

Answer: Progressive tax

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

View Answer

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

View Answer

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)

View Answer

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

View Answer

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.

View Answer

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

View Answer