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Public finance MCQ’s Online Preparation Test 3

Public finance is a method of providing funds for major capital investments. Prepare for your Public finance MCQ’s Test from NTS Test Preparation.


  1. Each question is of 2 marks, each test contains 10- 15 questions.
  2. Choose the right answer.
  3. To check, click on the ‘see answer’ button.
  4. Click on Submit button for result.
  5. Attempt other questions for preparation.


Online MCQs Preparation 3 Public Finance

1. Which is not counted as public expenditure?
a) Interest payment on national debt
b) Subsidy given to local city bus service
c) Investment spending by public companies
d) Defense expenditure

2. Which source a private company cannot use?
a) A bank overdraft
b) Deficit finance (new money)
c) Selling new shares in stock exchange
d) A bank loan

3. Progressive taxes:
a) Compel rich people to be honest
b) Bring equality in distribution of incomes
c) Increase government revenue
d) A and B

4. Which one is not a principle of taxation?
a) Principle of diversity
b) Principle of morality
c) Principle of certainty
d) Principle of equality

5. Net taxes are:
a) Total taxes minus govt. transfer payments
b) Domestic taxes minus foreign taxes
c) Business taxes minus personal taxes
d) Total taxes minus govt. purchases

6. In Pakistan, income tax is?
a) Direct
b) Proportional
c) Progressive tax
d) A and B

7. 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) 800
d) 600

8. The most important source of income as a government is?
a) Taxes
b) Foreign loans
c) Sprinting of new money
d) Sale of government property

9. If income tax is assessed as RS 100 on an income of RS 1000. Compared to this, which one of the following indicates that the income tax rate is prpgressive?
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

10. Which tax better conforms to the principle of equality in taxation?
a) Fixed tax
b) Regressive tax
c) Progressive tax
d) Proportional tax

Public finance MCQ’s Online Preparation Test 4 Click Here
Updated: May 31, 2018 — 8:41 pm

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