The term 'Base Year' in national income accounting is important because it: MCQ with Answer and Explanation

Question
The term 'Base Year' in national income accounting is important because it:
A. Determines the fiscal deficit target
B. Provides the price structure for calculating real GDP
C. Fixes the exchange rate
D. Determines the tax rates
Answer: Option B
Solution (By JKSSB Mock Tests)
The base year supplies the constant price weights used to compute real GDP and other volume measures, enabling meaningful comparisons over time.
This question belongs to: Economy GK Economy Set 1
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Practice More Economy Set 1 Questions

Question #1
Which of the following is a feature of the capital account convertibility?
A. Freedom to convert local currency into foreign currency for current account transactions only
B. Complete ban on capital flows
C. Freedom to convert local financial assets into foreign financial assets and vice versa
D. Only export-related convertibility
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Correct Answer: Option C

Explanation:
Capital account convertibility allows residents and non-residents to convert local currency into foreign currency and transfer capital freely for investment and other capital transactions.
This question belongs to: Economy GK Economy Set 1
Question #2
The 'Swachh Bharat Mission' was launched in which year?
A. 2014
B. 2016
C. 2019
D. 2012
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Correct Answer: Option A

Explanation:
Swachh Bharat Mission was launched on 2 October 2014.
This question belongs to: Economy GK Economy Set 1
Question #3
The 'Goods and Services Tax' is a consumption-based tax because it is levied at:
A. import stage only
B. production stage only
C. export stage
D. the point of supply for final consumption
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Correct Answer: Option D

Explanation:
GST is a destination-based consumption tax levied at the point of supply.
This question belongs to: Economy GK Economy Set 1
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