Which of the following is an automatic stabiliser in the fiscal system? MCQ with Answer and Explanation

Which of the following is an automatic stabiliser in the fiscal system?
A. Progressive income tax structure
B. One-time stimulus package
C. Discretionary increase in infrastructure spending
D. Change in repo rate by the central bank
Answer: Option A
Solution (By JKSSB Mock Tests)
Progressive income taxes automatically increase the tax burden during expansions and reduce it during contractions, stabilising disposable income without new legislation.

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Practice More Economy Set 1 Questions

Question #1
The 'Vote on Account' is used to:
A. present the full budget for the year
B. reduce fiscal deficit
C. impose new taxes
D. obtain Parliament's approval for expenditure for part of the financial year

Correct Answer: Option D


Explanation:
Vote on Account authorizes government expenditure for a limited period, usually before elections.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Emission Trading System' is a market-based approach to control pollution by:
A. creating tradable emission permits
B. subsidizing polluters
C. taxing all production
D. banning all emissions

Correct Answer: Option A


Explanation:
Emission trading creates a market for tradable emission allowances, limiting total emissions.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'GST Council' is chaired by the Union Finance Minister and includes which other representatives?
A. all state chief ministers
B. RBI governor
C. SEBI chairman
D. state finance ministers

Correct Answer: Option D


Explanation:
The GST Council includes state finance ministers as members, chaired by the Union Finance Minister.

This question belongs to: Economy GK Economy Set 1