The 'Goods and Services Tax' on food in restaurants is generally: MCQ with Answer and Explanation

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The 'Goods and Services Tax' on food in restaurants is generally:

A. 5%

B. 12%

C. 28%

D. 18%

Answer: Option A

Solution (By JKSSB Mock Tests)

Restaurant services generally attract 5% GST without input tax credit, but some categories differ.

This question belongs to: Economy GK Economy Set 1

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Question #1

If the price elasticity of demand for a good is exactly 1, an increase in its price will:

A. increase total revenue

B. decrease total revenue

C. eliminate all demand

D. leave total revenue unchanged

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Correct Answer: Option D

Explanation:
Unitary elastic demand means total expenditure remains constant when price changes.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a feature of the 'New Classical' school of macroeconomics?

A. Liquidity trap as a central concept

B. Importance of fiscal policy for stabilisation

C. Emphasis on sticky wages and prices

D. Rational expectations and continuous market clearing

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Correct Answer: Option D

Explanation:
New Classical economics assumes rational expectations and continuous market clearing, implying that systematic monetary policy cannot systematically affect real output.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a characteristic of the 'Global Savings Glut' hypothesis?

A. Only domestic factors determined interest rates

B. Capital flows were irrelevant

C. A global shortage of saving

D. A surplus of global saving relative to investment contributed to low interest rates and capital flows into deficit countries

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Correct Answer: Option D

Explanation:
The global-savings-glut hypothesis, advanced by Ben Bernanke, attributes the low long-term interest rates and large current-account deficits of some countries in the 2000s partly to excess saving in emerging Asia and oil-exporting economies.

This question belongs to: Economy GK Economy Set 1

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