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

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The 'Goods and Services Tax' Composition Scheme is designed to:

A. increase compliance burden

B. reduce compliance burden for small taxpayers

C. eliminate input tax credit for large taxpayers

D. increase tax rates

Answer: Option B

Solution (By JKSSB Mock Tests)

Composition scheme reduces compliance burden for small taxpayers.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

Which of the following is NOT a type of market failure?

A. Perfect competition

B. Externalities

C. Public goods

D. Asymmetric information

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Correct Answer: Option A

Explanation:
Market failure occurs when free markets fail to allocate resources efficiently. Causes include externalities, public goods, asymmetric information and monopoly power. Perfect competition is an ideal, not a failure.

This question belongs to: Economy GK Economy Set 1

Question #2

The concept of 'Social Marginal Cost' is relevant for:

A. Correcting externalities and optimal provision of public goods

B. Only calculating private profits

C. Only determining market prices

D. Private decision making only

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Correct Answer: Option A

Explanation:
Social marginal cost includes both private costs and external costs. It is used in the analysis of externalities and in determining the socially optimal level of output.

This question belongs to: Economy GK Economy Set 1

Question #3

The Phillips curve shows an inverse relationship between:

A. inflation and interest rates

B. money supply and price level

C. inflation and unemployment

D. output and employment

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Correct Answer: Option C

Explanation:
The Phillips curve suggests a short-run trade-off between inflation and unemployment.

This question belongs to: Economy GK Economy Set 1

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