Economic challenges in Pakistan MCQs

By: Prof. Dr. Fazal Rehman | Last updated: May 30, 2025

1. : Which of the following is a major economic challenge faced by Pakistan?
(A) Surplus budget
(B) High literacy rate
(C) Unemployment
(D) Stable inflation rate

2. : What is the primary reason behind Pakistan’s trade deficit?
(A) Exports exceeding imports
(B) Low production of goods and services
(C) Increased foreign investment
(D) Strong domestic demand

3. : Which sector in Pakistan is most affected by energy crises?
(A) Agriculture
(B) Manufacturing
(C) Information technology
(D) Tourism

4. : What role does corruption play in exacerbating economic challenges in Pakistan?
(A) It promotes economic growth
(B) It ensures equitable distribution of resources
(C) It undermines public trust and diverts funds from development projects
(D) It reduces inflation rates

5. : Which international organization has provided financial assistance to Pakistan to address its economic challenges?
(A) World Bank
(B) International Monetary Fund (IMF)
(C) Asian Development Bank (ADB)
(D) All of the above

6. : What impact does political instability have on Pakistan’s economy?
(A) Boosts investor confidence
(B) Promotes foreign direct investment
(C) Leads to capital flight and hampers economic growth
(D) Increases government revenue

7. : Which of the following is NOT a factor contributing to poverty in Pakistan?
(A) Limited access to education and healthcare
(B) Rapid population growth
(C) Adequate job opportunities
(D) Unequal distribution of wealth

8. : What is the impact of inflation on the purchasing power of the average Pakistani citizen?
(A) Increases purchasing power
(B) Decreases purchasing power
(C) No effect on purchasing power
(D) Stabilizes purchasing power

9. : Which economic policy aims to reduce government spending to control inflation and boost economic stability?
(A) Expansionary fiscal policy
(B) Contractionary fiscal policy
(C) Loose monetary policy
(D) Tight monetary policy

10. : How does Pakistan’s reliance on remittances contribute to its economic challenges?
(A) It reduces poverty rates
(B) It stabilizes the economy
(C) It exposes the economy to external shocks
(D) It promotes domestic investment

11. : Which of the following sectors in Pakistan is the largest contributor to GDP?
(A) Agriculture
(B) Services
(C) Manufacturing
(D) Information technology

12. : What role does infrastructure development play in addressing economic challenges in Pakistan?
(A) Hinders economic growth
(B) Enhances productivity and attracts investment
(C) Increases inflation rates
(D) None of the above

13. : What impact do trade deficits have on Pakistan’s foreign exchange reserves?
(A) Increases reserves
(B) Decreases reserves
(C) No effect on reserves
(D) Stabilizes reserves

14. : What is the primary source of revenue for the Pakistani government?
(A) Agricultural tax
(B) Corporate tax
(C) Value-added tax (VAT)
(D) Income tax

15. : What measures can Pakistan take to address its energy crisis and improve its economic outlook?
(A) Increase reliance on fossil fuels
(B) Invest in renewable energy sources
(C) Privatize energy sector
(D) Decrease subsidies on electricity

16. : How does brain drain affect Pakistan’s economy?
(A) Boosts innovation and entrepreneurship
(B) Reduces unemployment rates
(C) Leads to loss of skilled workforce and hampers economic growth
(D) None of the above

17. : Which economic indicator reflects the overall health of an economy?
(A) Gross Domestic Product (GDP)
(B) Consumer Price Index (CPI)
(C) Balance of Trade
(D) National Savings

18. : What role do international trade agreements play in Pakistan’s economic challenges?
(A) Promote exports and economic growth
(B) Increase trade barriers
(C) Stifle competition
(D) None of the above

19. : How does the informal economy contribute to Pakistan’s economic challenges?
(A) Provides employment opportunities
(B) Increases tax revenue
(C) Hinders economic growth and formalization
(D) Reduces poverty rates

20. : What impact does inflation have on foreign investment in Pakistan?
(A) Encourages foreign investment
(B) Discourages foreign investment
(C) No effect on foreign investment
(D) Stabilizes foreign investment

21. : What role does the lack of technological innovation play in Pakistan’s economic challenges?
(A) Enhances productivity
(B) Promotes economic growth
(C) Hinders competitiveness and limits growth potential
(D) Encourages foreign investment

22. : How does public debt affect Pakistan’s economic challenges?
(A) Reduces inflation
(B) Stabilizes exchange rates
(C) Increases fiscal deficit and debt servicing burden
(D) Promotes economic stability

23. : What impact do natural disasters have on Pakistan’s economy?
(A) Stimulate economic growth
(B) Enhance agricultural productivity
(C) Disrupt economic activities and infrastructure
(D) Increase foreign investment

24. : What role does foreign aid play in addressing Pakistan’s economic challenges?
(A) Reduces poverty rates
(B) Enhances infrastructure development
(C) Provides temporary relief but may lead to dependency
(D) Increases trade deficit

25. : How does political instability affect investor confidence in Pakistan?
(A) Boosts investor confidence
(B) Encourages foreign investment
(C) Deters investment and hampers economic growth
(D) Reduces inflation rates

26. : What measures can Pakistan take to address its high unemployment rates?
(A) Increase import tariffs
(B) Promote vocational training and entrepreneurship
(C) Reduce government spending
(D) Privatize public sector enterprises

27. : How does demographic transition impact Pakistan’s economic challenges?
(A) Increases productivity
(B) Reduces dependency ratio
(C) Creates pressure on resources and social services
(D) Encourages sustainable development

28. : Which sector in Pakistan is most susceptible to the effects of climate change?
(A) Agriculture
(B) Manufacturing
(C) Services
(D) Information technology

29. : What impact do trade imbalances have on Pakistan’s foreign exchange reserves?
(A) Increases reserves
(B) Decreases reserves
(C) Stabilizes reserves
(D) No effect on reserves

30. : What measures can Pakistan take to enhance its global competitiveness?
(A) Increase protectionist policies
(B) Invest in education and research and development
(C) Decrease reliance on international trade
(D) Nationalize key industries