Terminal Exam (Spring-2020)

Program: BSBA-4B Total Marks: 40 + 10 (viva)

Subject: Pakistan Economy Time Allowed: 3 hr

Q1. Objective

Instruction: Marks: 10
Solve the objective part on the answer sheet by mentioning your answers accordingly.
Save answer sheet file with your name and Submit it in MS Word format.

A. In an open economy, GDP is comprised of Consumption, Net Export, Interest

Payment, and Government Purchases.
a. True
b. False
B. Current account balance is the difference between the receipts and payments on
account of capital account and shows all financial transactions.
a. True
b. False
C. A financial market in which short-term debt or equity-backed securities are bought
and sold is known as money market.
a. True
b. False
D. State Bank of Pakistan is responsible to announce and implement the fiscal policy in
this country to achieve its objective.
a. True
b. False
E. Central bank increases the quantity of money supply by increasing the discount rate.
a. True
b. False
F. Fiscal balance refers to a situation when the total expenditure of the government and
total receipts (excluding borrowing) are not equal.
a. True
b. False
G. Income equality is the state of an economy in which the shares of total income earned
by the rich and poor are highly unequal.
a. True
b. False
H. In Pakistan, liberalization reforms were introduced during 1960s.
a. True
b. False
I. Commercial banks in Pakistan by law are not required to follow International Basel
III standards.
a. True
b. False
J. Land reforms of 1960s reduced the regional imbalances.
a. True
b. False
 Subjective
Marks: 30

Attempt all questions.

(Answers to the short questions should be specific and precise. Use your own wording to answer
a question. Pay attention to the allocated marks to each question)

Q2. Define traditional functions of State Bank of Pakistan? (2)

Q3. Explain the difference between the money market and the capital market? (2)

Q4. Explain the Green Revolution of 1960s? (3)

Q5. What were the negative and positive effects of agricultural reforms (introduced during the

decade of development) on Pakistan economy? (2)

Q6. Define key characteristics of balance of payment? (2)

Q7. Explain the role of IMF in Pakistan economy? How Pakistan can reduce its dependence

on the external debt? Highlight the importance of CPEC in this regard. (3)

Q8. Explain the difference between regressive taxation system and progressive taxation

system? Which taxation system should be used in Pakistan? and Why? (3)

Q9. What are the main components of balance of payment? Explain. (4)

Q10. Define and explain the main causes of balance of payment crisis for Pakistan? (5)

Q11. Explain following: (4)

i. Regional disparity?

ii. Purpose of taxation?

iii. How inflation can increase the balance of payment crisis?

iv. Balance of Trade?

**Good Luck**