Economy Set 1 MCQs

Economy GK

Economy Set 1 MCQs

Practice Economy GK MCQs on basic economic concepts including economy, economics, microeconomics, macroeconomics, goods and services, demand and supply, factors of production, opportunity cost, economic activities, sectors of economy and other fundamental concepts frequently asked in SSC, Railway, Banking, UPSC, JKSSB, JKPSC, Police, Defence and other competitive examinations.

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Practice Questions

Page 57 of 111
Question #1121
The 'Finance Commission' recommends distribution of which tax proceeds between the Centre and states?
A. net proceeds of divisible taxes
B. corporate tax only
C. central excise duties only
D. Customs duties only
Discuss
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Correct Answer: Option A

Explanation:
The Finance Commission recommends distribution of net proceeds of divisible taxes between Centre and states.
This question belongs to: Economy GK Economy Set 1
Question #1122
The 'Goods and Services Tax Compensation Cess' is levied to compensate states for:
A. loss due to natural calamities
B. loss of import revenue
C. loss of revenue due to GST implementation for a transition period
D. loss due to bank failures
Discuss
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Correct Answer: Option C

Explanation:
GST Compensation Cess compensates states for revenue loss due to GST implementation for five years.
This question belongs to: Economy GK Economy Set 1
Question #1123
The 'GST Council' decisions are taken by:
A. unanimous consent only
B. three-fourths majority with Centre having one-third weight
C. majority vote of all members
D. simple majority with states having two-thirds weight
Discuss
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Correct Answer: Option B

Explanation:
GST Council decisions require a three-fourths majority, with the Centre's vote having one-third weight and states two-thirds.
This question belongs to: Economy GK Economy Set 1
Question #1124
The 'Input Tax Credit' under GST allows a taxpayer to:
A. avoid filing returns
B. refund all taxes paid
C. deduct tax paid on inputs from output tax liability
D. pay tax only on exports
Discuss
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Correct Answer: Option C

Explanation:
Input Tax Credit permits deduction of input tax from output tax liability to avoid cascading.
This question belongs to: Economy GK Economy Set 1
Question #1125
The 'Composition Scheme' under GST is available to small taxpayers with turnover up to:
A. Rs 1.5 crore
B. Rs 5 crore
C. Rs 50 lakh
D. Rs 10 crore
Discuss
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Correct Answer: Option A

Explanation:
The composition scheme is available to taxpayers with annual turnover up to Rs 1.5 crore.
This question belongs to: Economy GK Economy Set 1
Question #1126
The 'e-Way Bill' is generated on the GST portal for movement of goods whose consignment value exceeds:
A. Rs 25,000
B. Rs 1 lakh
C. Rs 50,000
D. Rs 5 lakh
Discuss
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Correct Answer: Option C

Explanation:
E-way bill is required for goods movement valued above Rs 50,000.
This question belongs to: Economy GK Economy Set 1
Question #1127
The 'Customs duty' is levied on:
A. income of citizens
B. services only
C. domestic production
D. imports and exports of goods
Discuss
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Correct Answer: Option D

Explanation:
Customs duty is levied on imports and, in some cases, exports of goods.
This question belongs to: Economy GK Economy Set 1
Question #1128
The 'Safeguard duty' is imposed under WTO rules to:
A. promote free trade
B. tax all exports
C. temporarily protect domestic industry from a sudden surge in imports
D. permanently ban imports
Discuss
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Correct Answer: Option C

Explanation:
Safeguard duty is a temporary measure to protect domestic industry from an import surge.
This question belongs to: Economy GK Economy Set 1
Question #1129
The 'Export Promotion Capital Goods' scheme allows import of capital goods at:
A. zero duty subject to export obligation
B. prohibited duty
C. only after export
D. higher duty
Discuss
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Correct Answer: Option A

Explanation:
EPCG allows import of capital goods at zero or concessional duty subject to export obligations.
This question belongs to: Economy GK Economy Set 1
Question #1130
The 'Merchandise Exports from India Scheme' was replaced by which scheme?
A. RoDTEP
B. Advance Authorization
C. EPCG
D. SEIS
Discuss
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Correct Answer: Option A

Explanation:
MEIS was replaced by the Remission of Duties and Taxes on Exported Products scheme.
This question belongs to: Economy GK Economy Set 1
Question #1131
The 'Incoterms' in international trade are published by:
A. WTO
B. IMF
C. World Bank
D. International Chamber of Commerce
Discuss
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Correct Answer: Option D

Explanation:
Incoterms are published by the International Chamber of Commerce.
This question belongs to: Economy GK Economy Set 1
Question #1132
The 'Letter of Credit' in foreign trade is issued by:
A. the importer's bank
B. the WTO
C. the exporter
D. the customs authority
Discuss
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Correct Answer: Option A

Explanation:
A letter of credit is issued by the importer's bank guaranteeing payment to the exporter.
This question belongs to: Economy GK Economy Set 1
Question #1133
The 'Balance of Payments' current account includes which of the following?
A. External commercial borrowing
B. Portfolio investment
C. Net income from abroad
D. Foreign direct investment
Discuss
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Correct Answer: Option C

Explanation:
Net income from abroad is part of the current account.
This question belongs to: Economy GK Economy Set 1
Question #1134
The 'errors and omissions' item in the balance of payments is used to:
A. balance the statistical discrepancies
B. show exports
C. show foreign exchange reserves
D. show imports
Discuss
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Correct Answer: Option A

Explanation:
Errors and omissions balance statistical discrepancies so the BoP accounts sum to zero.
This question belongs to: Economy GK Economy Set 1
Question #1135
An 'export subsidy' is a payment to domestic producers that:
A. raises domestic prices only
B. increases their exports
C. reduces their exports
D. increases imports
Discuss
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Correct Answer: Option B

Explanation:
Export subsidies lower costs for exporters, enabling them to sell abroad at competitive prices.
This question belongs to: Economy GK Economy Set 1
Question #1136
The 'Most Favoured Nation' tariff treatment under WTO requires countries to:
A. impose zero tariffs on all goods
B. extend the same trade advantages to all WTO members
C. give special preferences to neighbours
D. ban imports
Discuss
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Correct Answer: Option B

Explanation:
MFN requires non-discriminatory treatment among all WTO members.
This question belongs to: Economy GK Economy Set 1
Question #1137
The 'General Agreement on Tariffs and Trade' was signed in which year?
A. 1944
B. 1995
C. 1947
D. 1955
Discuss
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Correct Answer: Option C

Explanation:
GATT was signed in 1947 and came into force in 1948.
This question belongs to: Economy GK Economy Set 1
Question #1138
The 'Uruguay Round' of GATT negotiations concluded in:
A. 2000
B. 1990
C. 1986
D. 1994
Discuss
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Correct Answer: Option D

Explanation:
The Uruguay Round concluded in 1994 and led to the creation of the WTO.
This question belongs to: Economy GK Economy Set 1
Question #1139
The 'Infant Industry Argument' for protection supports:
A. permanent tariffs on all imports
B. temporary protection to new industries to help them develop
C. protecting mature industries
D. free trade
Discuss
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Correct Answer: Option B

Explanation:
The infant industry argument supports temporary protection for new industries until they become competitive.
This question belongs to: Economy GK Economy Set 1
Question #1140
The 'Dutch disease' phenomenon in economics refers to:
A. a decline in manufacturing due to a boom in natural resource exports
B. a banking crisis
C. a fall in agricultural productivity
D. high inflation
Discuss
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Correct Answer: Option A

Explanation:
Dutch disease is a situation where a resource boom causes currency appreciation and decline in other tradable sectors like manufacturing.
This question belongs to: Economy GK Economy Set 1
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