The term 'Base Effect' is related to the calculation of: MCQ with Answer and Explanation

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The term 'Base Effect' is related to the calculation of:

A. Inflation rate

B. Balance of trade

C. Fiscal deficit

D. National income

Answer: Option A

Solution (By JKSSB Mock Tests)

Base effect refers to the impact of the price level of the previous year (base) on the calculation of the inflation rate in the current year.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'Goods and Services Tax' on a transaction is payable by the:

A. supplier, except under reverse charge

B. GST Council

C. government

D. buyer always

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Correct Answer: Option A

Explanation:
Generally the supplier pays GST, but under reverse charge the recipient pays.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a classification of taxes based on their impact on income distribution?

A. Only direct and indirect

B. Progressive, proportional and regressive

C. Only ad valorem and specific

D. Only central and state

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Correct Answer: Option B

Explanation:
Taxes are classified as progressive (rate rises with income), proportional (constant rate) or regressive (rate falls with income) according to their effect on income distribution.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Integrated GST' on interstate supply is collected by:

A. the Central Government

B. the exporting state

C. the local body

D. the consuming state directly

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Correct Answer: Option A

Explanation:
IGST is collected by the Central Government and then apportioned between Centre and states.

This question belongs to: Economy GK Economy Set 1

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