The 'Input Tax Credit' under GST allows a taxpayer to: MCQ with Answer and Explanation

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The 'Input Tax Credit' under GST allows a taxpayer to:

A. refund all taxes paid

B. pay tax only on exports

C. avoid filing returns

D. deduct tax paid on inputs from output tax liability

Answer: Option D

Solution (By JKSSB Mock Tests)

Input Tax Credit permits deduction of input tax from output tax liability to avoid cascading.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is an example of a merit good?

A. Education

B. Gambling

C. Cigarettes

D. Alcohol

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Correct Answer: Option A

Explanation:
Merit goods are those that the government feels people will under-consume and which ought to be subsidised or provided free, such as education and healthcare.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is used to measure multidimensional poverty?

A. Headcount ratio based only on income

B. Multidimensional Poverty Index (MPI)

C. Gini coefficient

D. Lorenz curve

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Correct Answer: Option B

Explanation:
The Multidimensional Poverty Index, developed by UNDP and OPHI, captures deprivations in health, education and living standards beyond income poverty.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the 'Portfolio Balance' approach to exchange-rate determination?

A. Only goods-market equilibrium determines the exchange rate

B. Exchange rates are determined by the relative supplies of and demands for domestic and foreign assets

C. Interest rates are irrelevant

D. Only purchasing-power parity matters

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Correct Answer: Option B

Explanation:
The portfolio-balance approach treats the exchange rate as the relative price of domestic and foreign assets and emphasises imperfect substitutability among assets denominated in different currencies.

This question belongs to: Economy GK Economy Set 1

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