The Gadgil formula was used for: MCQ with Answer and Explanation

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The Gadgil formula was used for:

A. sharing of income tax

B. determining agricultural prices

C. distribution of central plan assistance among states

D. allocation of bank credit

Answer: Option C

Solution (By JKSSB Mock Tests)

The Gadgil formula was used to allocate central plan assistance among states.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'Goods and Services Tax' on construction services is:

A. 18% for commercial construction

B. 28%

C. 5%

D. 12%

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Correct Answer: Option A

Explanation:
Commercial construction services attract 18% GST.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'National Income Committee' in independent India was appointed in which year?

A. 1947

B. 1949

C. 1950

D. 1952

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Correct Answer: Option B

Explanation:
The National Income Committee was appointed in 1949.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the 'Ricardian Equivalence Theorem'?

A. Only liquidity-constrained agents matter

B. Government debt is always neutral regardless of agents’ behaviour

C. Tax cuts financed by debt increase private consumption

D. Tax cuts financed by debt do not affect private consumption because agents anticipate future tax liabilities

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Correct Answer: Option D

Explanation:
Ricardian equivalence asserts that, under certain conditions, debt-financed tax cuts do not stimulate consumption because forward-looking agents save the tax cut to pay the future taxes needed to service the debt.

This question belongs to: Economy GK Economy Set 1

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