The 'Goods and Services Tax' rate on financial services is: MCQ with Answer and Explanation

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The 'Goods and Services Tax' rate on financial services is:

A. 18%

B. 28%

C. 12%

D. 5%

Answer: Option A

Solution (By JKSSB Mock Tests)

Financial services generally attract 18% GST.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The value of the investment multiplier is equal to:

A. 1 divided by MPC

B. 1 divided by MPS

C. MPC divided by MPS

D. MPS divided by MPC

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Correct Answer: Option B

Explanation:
The investment multiplier is 1/MPS, or 1/(1 - MPC).

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of public finance, the concept of 'Ricardian Equivalence' suggests that:

A. Deficit financing always increases private consumption

B. Tax-financed and debt-financed government spending have the same effect on the economy

C. Public debt has no intergenerational implications

D. Government borrowing is always expansionary

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Correct Answer: Option B

Explanation:
Ricardian Equivalence, proposed by David Ricardo and revived by Robert Barro, argues that rational agents anticipate future taxes to repay debt, so government borrowing does not stimulate demand.

This question belongs to: Economy GK Economy Set 1

Question #3

The Phillips Curve shows the relationship between:

A. Money supply and price level

B. Unemployment and inflation

C. Interest rate and investment

D. Inflation and economic growth

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Correct Answer: Option B

Explanation:
The Phillips Curve illustrates an inverse relationship between the rate of unemployment and the rate of inflation in an economy in the short run.

This question belongs to: Economy GK Economy Set 1

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