Level 1
Pakistan Economy MCQs set 2 for SPSC Sub Inspector (Sindh Police) Current Affairs — 20 solved questions.
Q1. What does FATF stand for?
Answer: Financial Action Task Force
Explanation: FATF stands for Financial Action Task Force, an intergovernmental organization founded in 1989 to set global standards for combating money laundering, terrorist financing, and other threats to the international financial system.
Q2. The China-Pakistan Economic Corridor (CPEC) is part of which broader Chinese initiative?
Answer: Belt and Road Initiative
Explanation: CPEC is a flagship corridor of China's Belt and Road Initiative (BRI), connecting Gwadar Port in Pakistan to Kashgar in China's Xinjiang region through a network of roads, railways, and pipelines.
Q3. CPEC (China-Pakistan Economic Corridor) is a flagship project of which Chinese initiative?
Answer: Belt and Road Initiative
Explanation: CPEC is explicitly described as a flagship project of China's Belt and Road Initiative, linking Pakistan's Gwadar Port to China's Xinjiang region to create a shorter trade route to the Arabian Sea.
Q4. The main corridor of CPEC connects Gwadar port in Pakistan to which Chinese city/region?
Answer: Kashgar (Xinjiang)
Explanation: The main CPEC corridor runs from Gwadar on the Arabian Sea coast northward through Pakistan to Kashgar (Kashi) in China's Xinjiang Uyghur Autonomous Region, a distance of roughly 3,000 km.
Q5. The ML-1 railway project, a key CPEC component, aims to upgrade the railway line between Karachi and which other Pakistani city?
Answer: Peshawar
Explanation: The ML-1 (Main Line-1) project aims to upgrade Pakistan's busiest railway line connecting Karachi to Peshawar, covering approximately 1,872 km, as a key CPEC transport infrastructure project.
Q6. The China-Pakistan Economic Corridor (CPEC) was formally launched during which year?
Answer: 2015
Explanation: CPEC was formally launched during Chinese President Xi Jinping's visit to Pakistan in April 2015, when 51 agreements and MoUs worth $46 billion were signed, initiating a transformative infrastructure program.
Q7. What is the total planned investment value of the China-Pakistan Economic Corridor (CPEC)?
Answer: Approximately USD 62 billion
Explanation: CPEC's total planned investment value has been revised upward to approximately $62 billion from the original $46 billion announced in 2015, as additional energy, infrastructure, and industrial zone projects were incorporated.
Q8. The National Finance Commission (NFC) Award primarily determines:
Answer: Distribution of federal tax revenue among provinces
Explanation: The National Finance Commission (NFC) Award is a constitutionally mandated mechanism that determines how revenues collected by the federal government are distributed among the four provinces and the federal government.
Q9. Pakistan's currency is officially known as:
Answer: Pakistan Rupee (PKR)
Explanation: Pakistan's official currency is the Pakistani Rupee (PKR), introduced in 1948 to replace the British Indian Rupee following independence, and regulated by the State Bank of Pakistan.
Q10. CPEC Special Economic Zones (SEZs) are primarily designed to attract which type of investment?
Answer: Foreign direct investment in industrial production
Explanation: CPEC Special Economic Zones (SEZs) are established to attract foreign direct investment by offering tax incentives, simplified regulations, and infrastructure to encourage industrial production and manufacturing.
Q11. What does CPEC stand for?
Answer: China-Pakistan Economic Corridor
Explanation: CPEC (China-Pakistan Economic Corridor) is a bilateral initiative worth over $62 billion linking Gwadar Port in Pakistan to Kashgar in China through infrastructure, energy, and industrial projects.
Q12. Pakistan's energy crisis is largely driven by accumulated unpaid dues in the power sector known as:
Answer: Circular debt
Explanation: Circular debt in Pakistan's power sector refers to the cascading chain of unpaid receivables between power consumers, DISCOs, power producers, fuel suppliers, and banks, which had exceeded PKR 2.6 trillion by 2023.
Q13. Which of the following is a key indicator used to measure the health of Pakistan's foreign exchange reserves?
Answer: Import cover in weeks or months
Explanation: Foreign exchange reserve adequacy is measured by import cover - the number of weeks or months of imports the reserves can finance - with three months considered a minimum safe threshold.
Q14. Pakistan's GDP growth rate fell sharply in the fiscal year 2022-23 primarily due to:
Answer: Devastating floods and economic stabilization measures
Explanation: Pakistan's GDP growth collapsed to about 0.3% in FY2022-23 due to the catastrophic 2022 floods, which devastated agriculture and infrastructure, compounded by tight IMF-mandated stabilisation policies.
Q15. Pakistan's current account deficit is significantly affected by the trade deficit, which means Pakistan:
Answer: Imports more than it exports
Explanation: Pakistan's chronic trade deficit means it imports significantly more than it exports, creating persistent pressure on foreign exchange reserves and contributing to recurring balance-of-payments crises requiring IMF intervention.
Q16. Which of the following best describes the role of the State Bank of Pakistan (SBP)?
Answer: It is the central bank responsible for monetary policy
Explanation: The State Bank of Pakistan (SBP) is Pakistan's central bank, responsible for formulating and implementing monetary policy, issuing currency, regulating banks, and managing foreign exchange reserves.
Q17. The Gwadar Port, a flagship CPEC project, is located in which Pakistani province?
Answer: Balochistan
Explanation: Gwadar Port is located in Gwadar district of Balochistan province on the Arabian Sea coast; it is the southern terminus of the China-Pakistan Economic Corridor (CPEC).
Q18. Pakistan's inflation surged above 30% in 2023, which type of inflation was primarily responsible?
Answer: Cost-push inflation driven by energy prices and currency depreciation
Explanation: Pakistan's inflation surge above 30% in 2023 was primarily cost-push in nature, driven by massive increases in energy prices (electricity and gas tariff hikes under IMF conditions) and sharp rupee depreciation increasing import costs.
Q19. Which IMF program preceded the 2019 Extended Fund Facility that Pakistan secured?
Answer: 2013 Extended Fund Facility
Explanation: The 2019 EFF was preceded by the 2013 Extended Fund Facility of approximately SDR 4.39 billion ($6.6 billion), which helped Pakistan stabilize its economy under the first PML-N government.
Q20. Pakistan's fiscal year runs from:
Answer: July to June
Explanation: Pakistan's fiscal year runs from July 1 to June 30, with the annual federal budget presented to the National Assembly in May or June each year before the start of the new fiscal year.