Correct Answer:
D. Monetization of the deficit
It can lead to inflation.
November 13, 2026 · Accounting and Finance MCQs, Public Finance & Budgeting MCQs
Financing a deficit by creating new money through the central bank is called:
Related MCQs
An annuity due is an annuity in which payments are made:
A.
At the end of each period
B.
At the beginning of each period
C.
Only once
D.
Never
Correct answer is:
B. At the beginning of each period
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Pakistan Investment Bonds (PIBs) are:
A.
Short-term overnight instruments
B.
Shares of the State Bank
C.
Foreign currency notes
D.
Medium to long-term government debt securities
Correct answer is:
D. Medium to long-term government debt securities
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The normal balance of a revenue account is:
A.
Debit
B.
Zero
C.
Depends on the auditor
D.
Credit
Correct answer is:
D. Credit
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Performance-based (results-oriented) budgeting:
A.
Lists expenditure by input only
B.
Links funding to outputs and outcomes
C.
Ignores results
D.
Is prepared after the fiscal year
Correct answer is:
B. Links funding to outputs and outcomes
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Actual hours are 90, standard hours allowed are 100 and the standard rate is Rs. 20. The labor efficiency variance is:
A.
Rs. 200 favorable
B.
Rs. 200 adverse
C.
Rs. 1,800 favorable
D.
Rs. 2,000 adverse
Correct answer is:
A. Rs. 200 favorable
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Value for money in public audit refers to:
A.
Obtaining the best outcome from resources spent, with economy, efficiency and effectiveness
B.
Spending as little as possible regardless of outcome
C.
Spending the entire budget
D.
Maximizing revenue only
Correct answer is:
A. Obtaining the best outcome from resources spent, with economy, efficiency and effectiveness
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