Tax buoyancy measures the responsiveness of: MCQ with Answer and Explanation

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Tax buoyancy measures the responsiveness of:

A. tax revenue to changes in GDP without discretionary changes

B. tax revenue to changes in GDP including discretionary changes

C. imports to exports

D. expenditure to revenue

Answer: Option B

Solution (By JKSSB Mock Tests)

Tax buoyancy includes both automatic and discretionary changes in tax revenue relative to GDP growth.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'ASEAN' grouping has how many member countries?

A. 10

B. 14

C. 8

D. 12

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Correct Answer: Option A

Explanation:
ASEAN has 10 member countries.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of economic growth, the Harrod-Domar model emphasises the role of:

A. Technological progress only

B. Labour force growth only

C. Savings and capital-output ratio

D. Natural resources only

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Correct Answer: Option C

Explanation:
The Harrod-Domar model states that the growth rate of an economy depends on the savings rate and the capital-output ratio (or inverse of the productivity of capital).

This question belongs to: Economy GK Economy Set 1

Question #3

In a liquidity adjustment facility, the reverse repo rate is typically how much below the repo rate?

A. 0.25 percentage points

B. 1.00 percentage point

C. 0.50 percentage points

D. 2.00 percentage points

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Correct Answer: Option C

Explanation:
The reverse repo rate is usually 0.50 percentage points below the repo rate, though the actual gap may vary.

This question belongs to: Economy GK Economy Set 1

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