Free Economy of Pakistan MCQs with Answers
390 Economy of Pakistan MCQs from Economics, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
Pakistan's economy is examined through agriculture, industry, services, trade, remittances, employment, population, poverty and regional development. The topic also covers GDP and national income, inflation, fiscal and monetary policy, taxation, public debt, the balance of payments, energy constraints and structural challenges, including the role of the State Bank and development planning.
Last updated
390 questions · page 20 of 20
- A. Lower borrowing costs and higher private investment
- B. Higher borrowing costs and lower private investment
- C. Lower exports and higher import duties
- D. Higher tax revenue without economic growth
Explanation: A lower policy rate can reduce market lending rates, encouraging firms and households to borrow and spend more.
Correct answer: Lower borrowing costs and higher private investment- A. Attract investment through concentrated infrastructure and incentives
- B. Replace the central bank's monetary policy committee
- C. Set national agricultural support prices
- D. Eliminate the need for domestic tax collection
Explanation: Special economic zones provide infrastructure, regulatory facilities and selected incentives to attract domestic and foreign investment.
Correct answer: Attract investment through concentrated infrastructure and incentives- A. Improved transport links connecting less-developed districts to markets
- B. A rise in the national inflation rate
- C. A fall in the currency's foreign exchange value
- D. An increase in the central bank's reserve requirement
Explanation: Better transport links can connect remote districts with suppliers, consumers, jobs and investment, helping spread economic activity…
Correct answer: Improved transport links connecting less-developed districts to markets- A. Wages paid to factory workers
- B. Rent received by a landlord
- C. Pension paid by the government
- D. Profit earned by a business
Explanation: A government pension is a transfer payment, so it redistributes income rather than rewarding current production.
Correct answer: Pension paid by the government- A. Higher tariffs and lower subsidies
- B. Progressive taxes and unemployment benefits
- C. Fixed exchange rates and export quotas
- D. Public debt and foreign reserves
Explanation: Progressive taxes collect relatively more revenue during expansions, while unemployment benefits support incomes during downturns.
Correct answer: Progressive taxes and unemployment benefits- A. 4 percent
- B. 8 percent
- C. 12 percent
- D. 20 percent
Explanation: The approximate real interest rate is calculated by subtracting inflation from the nominal interest rate.
Correct answer: 4 percent- A. Increase the number of farm workers
- B. Use large-scale machinery efficiently
- C. Raise the price of imported fertilizer
- D. Expand the rural population quickly
Explanation: Very small and scattered holdings reduce the efficient use of tractors, harvesters and other large machinery.
Correct answer: Use large-scale machinery efficiently- A. Record annual tax collections
- B. Present a development project for appraisal
- C. Set the central bank policy rate
- D. Report a company's export earnings
Explanation: PC-I is the standard project document used to present the objectives, costs, benefits and implementation details of a development project.
Correct answer: Present a development project for appraisal- A. Wider access to bank accounts and digital payments
- B. Higher duties on imported consumer goods
- C. A larger gap between urban and rural wages
- D. Lower production of formal financial records
Explanation: Financial inclusion means that households and businesses can access and use affordable formal financial services.
Correct answer: Wider access to bank accounts and digital payments- A. A fixed price for all exports
- B. Domestic price stability
- C. A balanced government budget
- D. A constant level of foreign investment
Explanation: The State Bank's primary objective is domestic price stability, while financial stability and support for economic policies are related…
Correct answer: Domestic price stability