Automatic stabilizers in fiscal policy include: MCQ with Answer and Explanation

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Automatic stabilizers in fiscal policy include:

A. changes in repo rate

B. open market operations

C. progressive income taxes and unemployment benefits

D. discretionary changes in government spending

Answer: Option C

Solution (By JKSSB Mock Tests)

Automatic stabilizers such as progressive taxes and unemployment benefits automatically reduce economic fluctuations.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Goods and Services Tax' rate on education and health care is zero because:

A. they are considered essential services

B. they are taxed by states

C. they are luxury services

D. they are outside GST

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Correct Answer: Option A

Explanation:
Education and health care are essential services and are exempted.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'National Institution for Transforming India' was formed on:

A. 1 January 2015

B. 26 January 2015

C. 15 August 2014

D. 1 January 2014

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Correct Answer: Option A

Explanation:
NITI Aayog was established on 1 January 2015.

This question belongs to: Economy GK Economy Set 1

Question #3

In the context of behavioural public finance, 'Tax Salience' refers to:

A. Only the statutory tax rate

B. The degree to which a tax is noticed and taken into account by decision-makers

C. Only the progressivity of the tax

D. Only the administrative cost of the tax

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Correct Answer: Option B

Explanation:
Tax salience measures how visible or noticeable a tax is to the agents who pay it; less salient taxes tend to produce smaller behavioural responses than more salient ones of equal magnitude.

This question belongs to: Economy GK Economy Set 1

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