A Pigouvian tax is imposed to: MCQ with Answer and Explanation

Question
A Pigouvian tax is imposed to:
A. reduce government revenue
B. increase imports
C. internalize the external cost of a negative externality
D. encourage production of positive externality goods
Answer: Option C
Solution (By JKSSB Mock Tests)
A Pigouvian tax is levied to make producers internalize the external cost of negative externalities.
This question belongs to: Economy GK Economy Set 1
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Practice More Economy Set 1 Questions

Question #1
The 'SAARC Preferential Trading Arrangement' became operational in which year?
A. 2005
B. 1995
C. 1990
D. 2000
Discuss
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Correct Answer: Option B

Explanation:
SAPTA became operational in 1995.
This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is a major objective of the Reserve Bank of India Act?
A. To collect direct taxes
B. To regulate the issue of bank notes and maintain monetary stability
C. To formulate five-year plans
D. To maximise government revenue
Discuss
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Correct Answer: Option B

Explanation:
The RBI Act, 1934 primarily aims at regulating the issue of bank notes, maintaining reserves to secure monetary stability and operating the currency and credit system of the country.
This question belongs to: Economy GK Economy Set 1
Question #3
The 'Money Bill' under Article 110 includes matters related to:
A. police
B. defence
C. taxation, borrowing, expenditure from Consolidated Fund
D. foreign affairs
Discuss
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Correct Answer: Option C

Explanation:
Money Bill deals with taxes, borrowing, custody of Consolidated Fund, etc.
This question belongs to: Economy GK Economy Set 1
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