12th Class Economics Full Book Short Questions Preparation Online

Question # 1

What is meant by direct tax.

Ans 1: Direct tax means the tax which is paid from the pocket of the person on when it is levied. It means the incidence and impact of the tax is one the same person income tax, peoperty tax and wealth tax are the examples of this kind of tax.

Question # 2

What is meant by Average propensity to consume.

Ans 1: 1- Average propensity to consume
Ans 2: The ratio between consumption and income is called average propensity to consume. To find average propensity to consume consumption is divided by income average propensity to consume= Comsumption/income

Question # 3

Different betwene Fee and Tax.

Ans 1: Fee is the reward of the government's services from which the people are benefited, while the tax payer can not demand for direct personal benefit from the goverenment in return for payment of tax.

Question # 4

What is industrial bank.

Ans 1: Industrial bank advances loans to industrialists for the growth and development of industry only. This bank advances loans toindustialists for short term. medium term and long term. Although this bank receives depoists like commerccial banks. but advances loans only for industrial purposes. Industrial loans are advanced in the form of both domestic currency and foreign exchange.

Question # 5

Define Travelers cheque.

Ans 1: Bank issues traveler 's cheque to its customers to save them front the problem of safe custody of cash during traveling. People deposit their amount in the bank to get this cheque and the bak isssues them traverler's cheque.

Question # 6

What is meant by productivity of labour.

Ans 1: Productiveity of labor means the productiv epower of labourerrs or power of performance.

Question # 7

Write five suggestions to solve the problems of industrial sector

Ans 1: 1- Banks and other financial institutionn shuld be established to provide capita to industrials
Ans 2: 2- Shortage of enery should be removed
Ans 3: 3- Concession shoud be given in taxes
Ans 4: 4- Private sector should be encourged
Ans 5: 5- Number of enterpreneurs should be increased.

Question # 8

What is meant by open market operation.

Ans 1: The policy of the centrla bank to control credit in the country is called monetary policy.

Question # 9

What is meant by demand pull inflation.

Ans 1: If prices rise continuously due to rise in demand for goods, it is called demand pull inflatiion.

Question # 10

Write four points of similarities between public finance and private finance.

Ans 1: 1- Balane between income and expenditure.
Ans 2: 2- Maximum utlization of scarece means.
Ans 3: 3- Need of loans. 4- Increase in income trough investment.

Question # 11

Defeine money in the words of Prof. Crowther.

Ans 1: Anything whihc is generally accepted as a medium of exchange and also performs functions of a standard of value and a store of value is money

Question # 12

Write salient features of Capitalism.

Ans 1: 1- Right of private ownership 2- Freedom of business
Ans 2: 3- Freedom of choice 4- Sovereignty of consumers
Ans 3: 5- Effective role of price system 6- Presence of competition and unity
Ans 4: 7- Proft is the motive of economic activites.
Ans 5: 8- Unequal distribution of wealth 9- Unstable economy

Question # 13

Explain limed legal tender money.

Ans 1: The kind of money in which payment canbe made only to a certain extant is called Limited legal tender money. In Pakistan. 25 paisa and other lower value coins were limited legal tender money One could pay up to 20 Rupees by these coins.

Question # 14

Define good ness.

Ans 1: Good ness means dealing with kindness, bounty etc and give others more than their rights and take less for himself

Question # 15

What is tax culture.

Ans 1: " Tax is the reward of the services which a governemnt performs as a whole for people, for example keepingarmy for defence of the cutnry. maintaining law and order in the cournty rand making vast rrangement of police and couries etc.

Question # 16

Expoain the concept of Disposable personal income.

Ans 1: The income i the possession of an indivudual after the payment of direct taxes is called disposable personal income. It is at the disposal of the person and he can spend it accordingto his own free will.
Ans 2: Disposable personal income = personal income- Direct taxes

Question # 17

Write five causes ofunemployment and disguised uemployment.

Ans 1: 1- Population pressure 2- Underutilization of natural resources
Ans 2: 3- Shortage of capital 4- Industirial back wardness
Ans 3: 5- Shrotage of skiled persons.

Question # 18

Write four causes of deficit balance of payments of country.

Ans 1: 1- Decrease in exports.
Ans 2: 2- Increase in imports
Ans 3: 3- inflation
Ans 4: 4- Unfavourable terms of trade

Question # 19

What is subsidy

Ans 1: Sometimes governemnt wants to provide some goods to the public at a lower price than market price. The governemnt purchases them at higher price and sells at a low price to the public at utility stores and cooperative stores. It is called Subsidy, for example, if government purchases flour at Rs. 10/- per kg and sells it at Rs. 8/- per kg, than subsidy will be Rs. 2/- per kg.

Question # 20

Write kind of public budget.

Ans 1: 1- Revenue budget 2- Capital budget

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