The 'Goods and Services Tax' Composition Scheme is designed to: MCQ with Answer and Explanation

The 'Goods and Services Tax' Composition Scheme is designed to:
A. increase compliance burden
B. increase tax rates
C. eliminate input tax credit for large taxpayers
D. reduce compliance burden for small taxpayers
Answer: Option D
Solution (By JKSSB Mock Tests)
Composition scheme reduces compliance burden for small taxpayers.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is a characteristic of the 'Rational Expectations' hypothesis?
A. Agents ignore all available information
B. Expectations are always adaptive
C. Agents use only past information and make systematic errors
D. Agents form expectations using all available information and do not make systematic errors

Correct Answer: Option D


Explanation:
Rational expectations imply that agents optimally use all available information, so that forecast errors are uncorrelated with information known at the time the expectation is formed.

This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is a characteristic of the 'Risk-Sharing' benefits of international financial integration?
A. Countries can smooth consumption in the face of idiosyncratic shocks by trading claims on future output
B. Integration always increases consumption volatility
C. Risk-sharing is irrelevant for welfare
D. Only closed economies can smooth consumption

Correct Answer: Option A


Explanation:
International risk-sharing allows countries to diversify away country-specific income shocks by holding foreign assets, thereby reducing the volatility of national consumption relative to national output.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'Goods and Services Tax' on franchise services is:
A. 28%
B. 12%
C. 5%
D. 18%

Correct Answer: Option D


Explanation:
Franchise services attract 18% GST.

This question belongs to: Economy GK Economy Set 1