Public Finance Test 02 Mcqs Preparation Online

1. In Pakistan Income tax is?

A. Direct

B. (a) and (b) of above

C. Proportional

D. Progressive tax

2. The most important source of income of a government is?

A. Foreign loans

B. Sale of government property

C. Taxes

D. Sprinting of new money

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?

A. Rs. 350 tax on Rs. 3000 income

B. Rs. 450 tax on Rs. 5000 income

C. Rs. 150 tax on Rs. 2000 income

D. Rs. 400 tax on Rs. 4000 income

4. Progressive taxes?

A. Compel rich people to be honest

B. (a) & (b) of above

C. Increase government revenue

D. Bring equality in distribution of incomes

5. Which is not counted as public expenditure?

A. Interest payment on national debt.

B. Defence expenditure

C. Investment spending by public companies

D. Subsidy given to local city bus service

6. Which one is not a principle of taxation?

A. Principle of morality

B. Principle of diversity

C. Principle of certainty

D. Principle of equality

7. Which source a private company cannot use?

A. A bank overdraft

B. Deficit finance (new money)

C. A bank loan

D. Selling new shares in stock exchange

8. Which tax better conforms to the principle of equality in taxation?

A. Proportional tax

B. Regressive tax

C. Progressive tax

D. Fixed tax

9. Net taxes are?

A. Total taxes minus govt. transfer payments

B. Business taxes minus personal taxes

C. Total taxes minus govt. purchases

D. Domestic taxes minus foreign taxes

10. 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. 600

B. 400

C. 200

D. 800

Public Finance Test 02 Mcqs Preparation Online

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