If the State Bank of Pakistan wished to pursue a tight monetary policy it would ?

A. Reduce the minimum reserve asset ratio.
B. Buy government securities on the open market
C. Lower interest rates
D. Sell government securities on the open market

Over-funding is when the State Bank of Pakistan ?

A. Sells less government bonds than are required to finance the psbr
B. Sells more government bonds than are required to finance the psbr
C. Sells government securities on the open market
D. Buys government securities on the open market

The marginal rate of tax paid is ?

A. The total tax paid / total income
B. Total income / total tax paid
C. Change in the tax paid / change in income
D. Change in income / change in tax paid

The public Sector Net Cash Requirement (PSNCR) is ?

A. A measure of the country’s trade position
B. A measure of the country’s budget position
C. A measure of the country’s total debt
D. A measure of the government’s monetary stance

As an economy grows ?

A. The government’s budget position should automatically improve
B. The government’s budget position should automatically worsen
C. This will have no effect on the government’s budget position
D. This will reduce the government’s tax revenue

Net taxes are ?

A. Taxes paid by firms and households to the government minus the cost of collecting the taxes
B. Taxes paid firms and households to the government minus the transfer payments made to firms and household
C. Taxes paid by firms and households to the government plus transfer payments made to firm and households
D. Government expenditures minus government revenues

Automatic stabilizers act to ______ government expenditures and _______ government revenue during an expansionary period?

A. Increase; increase
B. Decrease; increase
C. Increase; decrease
D. Decrease; decrease

Fiscal drag occurs when ?

A. Tax bands do not increase with inflation
B. Tax rates move inversely with inflation
C. Government spending falls to reduce aggregate demand
D. Tax banks increase with inflation

Imagine there is no tax on income up to Rs 1000 after that there is a tax of 505 what is the average tax rate on an income of Rs 20,000 ?

A. Rs 50000
B. 20%
C. 25%
D. Rs 10000

Fiscal Policy refers to ?

A. The government regulation of financial intermediaries
B. The spending and taxing policies used by the government to influence the economy
C. The actions of the central bank in controlling the money supply
D. The government’s attitude to taxation