A progressive income tax is one where: MCQ with Answer and Explanation

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A progressive income tax is one where:

A. the tax rate is constant at all incomes

B. only the poor pay tax

C. the tax rate decreases as income rises

D. the tax rate increases as income rises

Answer: Option D

Solution (By JKSSB Mock Tests)

Under a progressive tax, the average tax rate rises as income increases.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'C2 cost' in agriculture includes A2 plus family labour plus:

A. only pesticide cost

B. only fertilizer cost

C. only seed cost

D. interest on land and fixed capital

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Correct Answer: Option D

Explanation:
C2 cost includes A2 plus family labour plus interest on land and fixed capital.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a feature of the 'Life-Cycle' and 'Permanent-Income' hypotheses taken together?

A. Both ignore the role of wealth

B. Both claim that only current income matters

C. Both emphasise that consumption depends on long-run resource constraints rather than current income alone

D. Both assume infinite horizons only

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Correct Answer: Option C

Explanation:
Both the life-cycle hypothesis and the permanent-income hypothesis assert that forward-looking consumers base consumption on expected lifetime or permanent resources rather than on current income alone.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a major objective of the Goods and Services Tax in India?

A. To increase cascading of taxes

B. To increase the number of indirect taxes

C. To eliminate all central taxes

D. To create a unified national market and reduce cascading effect

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Correct Answer: Option D

Explanation:
GST aims to create a common national market, eliminate the cascading effect of taxes through input tax credit, and simplify the indirect tax structure.

This question belongs to: Economy GK Economy Set 1

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