Which of the following is a feature of the Indian fiscal federalism? MCQ with Answer and Explanation

Which of the following is a feature of the Indian fiscal federalism?
A. Absence of any sharing of taxes
B. Division of tax powers between Centre and States with Finance Commission recommendations
C. Only states collect all major taxes
D. Complete centralisation of all taxes
Answer: Option B
Solution (By JKSSB Mock Tests)
Indian fiscal federalism involves constitutional division of tax bases between the Centre and States, with the Finance Commission recommending the sharing of divisible taxes and grants.

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Practice More Economy Set 1 Questions

Question #1
In the context of the digital economy, 'Zero-Price Markets' are characterised by:
A. Only traditional markets with positive prices
B. Markets without any economic activity
C. Markets in which the monetary price charged to users is zero and platforms monetise through other means such as advertising or data
D. Markets in which all goods are free without any monetisation

Correct Answer: Option C


Explanation:
Zero-price markets are those in which consumers pay no monetary price; the platform typically monetises through advertising, data sales or complementary paid services, raising distinctive issues for competition analysis.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Goods and Services Tax' rate on education and health care is zero because:
A. they are luxury services
B. they are considered essential services
C. they are taxed by states
D. they are outside GST

Correct Answer: Option B


Explanation:
Education and health care are essential services and are exempted.

This question belongs to: Economy GK Economy Set 1
Question #3
The concept of 'Tobin's q' is defined as:
A. The ratio of money supply to GDP
B. The ratio of the market value of installed capital to its replacement cost
C. The ratio of consumption to income
D. The ratio of investment to saving

Correct Answer: Option B


Explanation:
Tobin's q is the ratio of the market value of a firm's capital to the replacement cost of that capital. Investment is encouraged when q > 1 and discouraged when q < 1.

This question belongs to: Economy GK Economy Set 1