The 'tax incidence' of a tax refers to: MCQ with Answer and Explanation

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The 'tax incidence' of a tax refers to:

A. who legally pays the tax

B. the tax rate

C. the amount of tax collected

D. who ultimately bears the economic burden of the tax

Answer: Option D

Solution (By JKSSB Mock Tests)

Tax incidence is the distribution of the economic burden of a tax between buyers and sellers.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'systemically important financial institution' is one whose failure could:

A. trigger a systemic crisis

B. have no effect on the economy

C. benefit other banks

D. reduce inflation

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Correct Answer: Option A

Explanation:
A systemically important institution is too big or interconnected to fail without causing systemic risk.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'rational expectations' hypothesis assumes people:

A. ignore information

B. have no expectations

C. use all available information to form expectations

D. only use past values

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Correct Answer: Option C

Explanation:
Rational expectations assumes agents use all available information efficiently.

This question belongs to: Economy GK Economy Set 1

Question #3

The Reserve Bank of India was nationalized in the year:

A. 1955

B. 1935

C. 1949

D. 1947

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Correct Answer: Option C

Explanation:
The RBI was nationalized in 1949.

This question belongs to: Economy GK Economy Set 1

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