The 'Goods and Services Tax' on hotel room service is: MCQ with Answer and Explanation

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The 'Goods and Services Tax' on hotel room service is:

A. 5%

B. 12%

C. 18%

D. 28%

Answer: Option C

Solution (By JKSSB Mock Tests)

Room service in hotels generally attracts 18% GST.

This question belongs to: Economy GK Economy Set 1

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Question #1

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Which of the following best explains the concept of 'Adverse Selection'?

A. Perfect information leading to efficient outcomes

B. Change in behaviour after a contract is signed

C. Equal risk sharing between parties

D. Situation where one party has more information before entering a contract

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Correct Answer: Option D

Explanation:
Adverse selection occurs when asymmetric information exists before a contract is signed, leading to the selection of undesirable parties (e.g., high-risk individuals buying more insurance).

This question belongs to: Economy GK Economy Set 1

Question #2

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Purchasing Power Parity theory states that exchange rates between currencies adjust to equalize:

A. government budget deficits

B. interest rates

C. the purchasing power of currencies in terms of goods

D. inflation rates only

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Correct Answer: Option C

Explanation:
Purchasing Power Parity says exchange rates adjust so that identical goods cost the same in different currencies.

This question belongs to: Economy GK Economy Set 1

Question #3

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GDP at market prices equals GDP at factor cost:

A. plus indirect taxes minus subsidies

B. plus indirect taxes plus subsidies

C. minus indirect taxes plus subsidies

D. minus indirect taxes minus subsidies

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Correct Answer: Option A

Explanation:
GDP at market prices = GDP at factor cost + indirect taxes - subsidies.

This question belongs to: Economy GK Economy Set 1

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