Tax elasticity measures the automatic response of tax revenue to changes in GDP: MCQ with Answer and Explanation

Question

Share Report Error

Tax elasticity measures the automatic response of tax revenue to changes in GDP:

A. considering only indirect taxes

B. after discretionary tax changes

C. considering only direct taxes

D. without considering discretionary tax changes

Answer: Option D

Solution (By JKSSB Mock Tests)

Tax elasticity measures the built-in response of tax revenue to GDP changes without discretionary changes.

This question belongs to: Economy GK Economy Set 1

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Economy Set 1 Questions

Question #1

Which of the following is a feature of the Indian monetary system?

A. Complete free floating without RBI role

B. Fixed exchange rate without any intervention

C. Managed floating exchange rate with inflation targeting

D. Gold standard

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option C

Explanation:
India follows a managed floating exchange rate regime and has adopted a flexible inflation targeting framework for monetary policy.

This question belongs to: Economy GK Economy Set 1

Question #2

In the two-commodity consumer equilibrium condition, which equality must hold?

A. Px × MUx = Py × MUy

B. MUx = MUy

C. Px/Py = MUy/MUx

D. MUx/Px = MUy/Py

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option D

Explanation:
The consumer is in equilibrium when marginal utility per rupee is equal for all goods: MUx/Px = MUy/Py.

This question belongs to: Economy GK Economy Set 1

Question #3

If a country's current account is in deficit, its capital account must be in:

A. equilibrium

B. surplus or official reserves must fall

C. zero

D. deficit as well

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option B

Explanation:
A current account deficit must be financed by a capital account surplus or a drawdown of official reserves.

This question belongs to: Economy GK Economy Set 1

Explore All Economy Set 1 MCQs