The 'Base Erosion and Profit Shifting' concerns tax avoidance by: MCQ with Answer and Explanation

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The 'Base Erosion and Profit Shifting' concerns tax avoidance by:

A. non-profit organizations

B. government departments

C. multinational enterprises shifting profits to low-tax jurisdictions

D. individual employees

Answer: Option C

Solution (By JKSSB Mock Tests)

BEPS involves multinational enterprises shifting profits to low-tax jurisdictions.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a characteristic of the 'Learning-by-Doing' models of growth?

A. Experience has no effect on productivity

B. Productivity is completely exogenous

C. Only formal R&D matters

D. Productivity rises as a by-product of cumulative production experience

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Correct Answer: Option D

Explanation:
Learning-by-doing models, originating with Arrow, treat increases in productivity as an automatic by-product of the accumulation of production experience (cumulative output).

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Goods and Services Tax' has subsumed taxes like entry tax, which has helped reduce:

A. customs duty

B. check posts and barriers at state borders

C. direct tax

D. income tax

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Correct Answer: Option B

Explanation:
Subsuming entry tax reduced state border check posts and barriers.

This question belongs to: Economy GK Economy Set 1

Question #3

In the context of labour-market institutions, the 'Ghent System' refers to:

A. Only government-run unemployment insurance with no union role

B. A system in which trade unions play a major role in the administration of unemployment insurance, contributing to high union density

C. A pure market system without any unions

D. Only private insurance markets

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Correct Answer: Option B

Explanation:
The Ghent system, historically associated with certain Nordic and Low Countries, links unemployment benefits to union membership or administration, thereby providing a selective incentive for workers to join unions.

This question belongs to: Economy GK Economy Set 1

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