At what rate zakat is paid?
- 2%
- 2.5%
- 3%
- 5%
Show answer and explanation
Answer: B. 2.5%
Zakat is levied at the rate of 2.5% annually on wealth/savings above the nisab threshold.
I.Com Economics: Public Finance, questions with answers
Practise 52 real Federal Board questions on Public Finance from 2023 to 2026. See the answer and explanation as soon as you answer.
52real questions
22multiple choice
5exam sessions
About Public Finance in I.Com Economics
Public Finance is one of the 8 main chapters in our Federal Board I.Com Economics question bank (11th and 12th class), and about 15% of its real questions come from it. Tayyari Karo has 52 real questions on this chapter from 2023 to 2026; 22 are multiple choice and marked instantly, and the rest are short and long questions with a model answer. By difficulty: 28 easy, 24 medium.
Work through the questions below, then open the explanation for each one. Redo the ones you missed a few days later.
Try 8 real questions
These are real past-paper questions. Think of your answer first, then open the explanation.
Which of the following is progressive tax in Pakistan?
- Sales tax
- Custom duty
- Excise tax
- Income tax
Show answer and explanation
Answer: D. Income tax
Income tax rates rise with income level in Pakistan, making it a progressive tax.
If the government's revenue exceeds its expenditure, then budget is:
- Deficit budget
- Surplus budget
- Balanced budget
- Capital budget
Show answer and explanation
Answer: B. Surplus budget
A surplus budget occurs when government revenue is greater than its expenditure.
Which of the following canon of taxation was presented by Adam Smith?
- Canon of Productivity
- Canon of diversity
- Canon of economy
- Canon of elasticity
Show answer and explanation
Answer: C. Canon of economy
Adam Smith's four canons of taxation are equality, certainty, convenience, and economy.
If Government increases tax, private savings will:
- Increase
- Decrease
- Not change
- Become zero
Show answer and explanation
Answer: B. Decrease
Higher taxes reduce disposable income available to households, which lowers private savings.
Which of the following canons of taxation was not presented by Adam Smith?
- Canon of equality
- Canon of certainty
- Canon of convenience
- Canon of elasticity
Show answer and explanation
Answer: D. Canon of elasticity
Adam Smith's four canons are equality, certainty, convenience and economy; elasticity is not one of them.
What is subsidy? Give one example.
Show model answer
A subsidy is a financial grant or benefit given by the government to producers or consumers to lower the price/cost of a good and encourage its production or consumption. Example: the government subsidizing fertilizer prices to support farmers and boost agricultural output.
What are the differences between public and private finance?
Show model answer
Public finance (government income/expenditure): the government can create money and borrow extensively, often decides expenditure first and then arranges revenue, and aims at social welfare rather than profit; its budget can run into surplus or deficit deliberately as a policy tool.
Private finance (individual/household income/expenditure): a private entity cannot create money, must generally adjust expenditure to match its income, aims primarily at personal benefit/profit, and its finances are typically kept secret (unlike the public nature of the government's budget).
Sessions with Public Finance questions
| Session | Questions |
|---|---|
| 2026 Annual | 3 |
| 2025 1st Annual | 11 |
| 2025 2nd Annual | 13 |
| 2024 Annual | 10 |
| 2023 Annual | 15 |
Common questions
What does the Public Finance chapter cover on this page?
52 real Federal Board (FBISE) Economics questions on Public Finance from 2023 to 2026, for 11th and 12th class. Each one shows the session it came from.
Are the answers official?
No. We could not find an official FBISE marking scheme for these papers, so the answers and explanations are written by Tayyari Karo for practice. Check anything important with your teacher or textbook.
Is it free?
You can start free with no signup. A small set of papers per subject is free, and Premium unlocks the full question bank.