{"id":13384,"date":"2025-09-30T10:55:13","date_gmt":"2025-09-30T09:55:13","guid":{"rendered":"https:\/\/mcqsadda.com\/?p=13384"},"modified":"2025-10-24T05:44:34","modified_gmt":"2025-10-24T04:44:34","slug":"taxation-and-gdp-top-100-mcqs-with-answer-and-explanation","status":"publish","type":"post","link":"https:\/\/mcqsadda.com\/index.php\/2025\/09\/30\/taxation-and-gdp-top-100-mcqs-with-answer-and-explanation\/","title":{"rendered":"Taxation and GDP\u00a0Top 100 MCQs With Answer and Explanation"},"content":{"rendered":"\n

1. Tax is a:<\/mark><\/strong>
A) Voluntary payment to government
B) Compulsory payment without direct benefit
C) Fee for services rendered
D) Donation to government
Answer: B<\/strong>
Explanation:<\/strong> Tax is a compulsory payment<\/strong> imposed by govt with no direct quid pro quo.<\/p>\n\n\n\n

2. The main purpose of taxation is:<\/mark><\/strong>
A) Social welfare
B) Raising revenue for govt
C) Reducing inequality
D) All of the above
Answer: D<\/strong>
Explanation:<\/strong> Taxes serve fiscal, social and redistributive functions<\/strong>.<\/p>\n\n\n\n

3. Direct tax is imposed on:<\/mark><\/strong>
A) Income and wealth of individuals\/firms
B) Goods and services
C) Imports only
D) Exports only
Answer: A<\/strong>
Explanation:<\/strong> Direct taxes \u2192 income tax, corporate tax, wealth tax<\/strong>.<\/p>\n\n\n\n

4. Indirect tax is imposed on:<\/mark><\/strong>
A) Salaries
B) Profits
C) Goods and services
D) Property
Answer: C<\/strong>
Explanation:<\/strong> Indirect tax (GST, excise, customs) \u2192 levied on goods\/services<\/strong>.<\/p>\n\n\n\n

5. A progressive tax system means:<\/mark><\/strong>
A) Tax rate increases as income increases
B) Same tax rate for all
C) Tax rate decreases with higher income
D) Indirect taxes only
Answer: A<\/strong>
Explanation:<\/strong> Progressive tax \u2192 higher income, higher rate<\/strong>.<\/p>\n\n\n\n

6. A regressive tax system means:<\/mark><\/strong>
A) Tax rate rises with income
B) Tax rate falls with higher income
C) Equal tax rate for all
D) Indirect tax on services
Answer: B<\/strong>
Explanation:<\/strong> In regressive tax, burden is heavier on poor<\/strong>.<\/p>\n\n\n\n

7. Proportional tax means:<\/mark><\/strong>
A) Same percentage of income taxed for all levels
B) Higher rate for higher income
C) Lower rate for higher income
D) Zero tax rate
Answer: A<\/strong>
Explanation:<\/strong> In proportional tax \u2192 fixed rate for all<\/strong> (e.g., 10% flat tax).<\/p>\n\n\n\n

8. Which tax is considered more equitable?<\/mark><\/strong>
A) Direct tax
B) Indirect tax
C) Regressive tax
D) Proportional tax
Answer: A<\/strong>
Explanation:<\/strong> Direct taxes depend on ability to pay \u2192 more equitable.<\/p>\n\n\n\n

9. Which tax is easier to collect?<\/mark><\/strong>
A) Direct tax
B) Indirect tax
C) Wealth tax
D) Capital gains tax
Answer: B<\/strong>
Explanation:<\/strong> Indirect taxes (GST) are collected at point of sale<\/strong>.<\/p>\n\n\n\n

10. Which tax has higher chances of evasion?<\/mark><\/strong>
A) Direct tax
B) Indirect tax
C) GST
D) Excise duty
Answer: A<\/strong>
Explanation:<\/strong> Income taxes are more prone to evasion<\/strong> than GST.<\/p>\n\n\n\n

11. The main drawback of indirect tax is:<\/mark><\/strong>
A) Regressive nature
B) Encourages black money
C) Difficult to administer
D) Not linked to consumption
Answer: A<\/strong>
Explanation:<\/strong> Indirect taxes fall equally on rich & poor \u2192 regressive<\/strong>.<\/p>\n\n\n\n

12. Corporate tax is a:<\/mark><\/strong>
A) Direct tax
B) Indirect tax
C) Regressive tax
D) Wealth tax
Answer: A<\/strong>
Explanation:<\/strong> Corporate tax = direct tax on company profits.<\/p>\n\n\n\n

13. GST in India is a:<\/mark><\/strong>
A) Direct tax
B) Indirect tax
C) Progressive tax
D) Wealth tax
Answer: B<\/strong>
Explanation:<\/strong> GST is an indirect tax on goods and services<\/strong>.<\/p>\n\n\n\n

14. The principle of taxation given by Adam Smith is:<\/mark><\/strong>
A) Ability to pay principle
B) Benefit principle
C) Equal sacrifice principle
D) All of the above
Answer: A<\/strong>
Explanation:<\/strong> Adam Smith\u2019s canons of taxation<\/strong> stress ability to pay.<\/p>\n\n\n\n

15. Benefit principle of taxation means:<\/mark><\/strong>
A) Rich should pay more
B) Tax paid in proportion to benefit received from govt services
C) Same tax for all
D) Tax only on poor
Answer: B<\/strong>
Explanation:<\/strong> People should pay according to benefits enjoyed<\/strong>.<\/p>\n\n\n\n

16. Which tax reduces inequality most effectively?<\/mark><\/strong>
A) Indirect taxes
B) Progressive direct taxes
C) Proportional taxes
D) Customs duty
Answer: B<\/strong>
Explanation:<\/strong> Progressive direct taxes reduce income disparity<\/strong>.<\/p>\n\n\n\n

17. Customs duty is a type of:<\/mark><\/strong>
A) Direct tax
B) Indirect tax
C) Progressive tax
D) Local tax
Answer: B<\/strong>
Explanation:<\/strong> Customs duty = indirect tax on imports\/exports<\/strong>.<\/p>\n\n\n\n

18. Excise duty is imposed on:<\/mark><\/strong>
A) Imports
B) Exports
C) Domestic production of goods
D) Services only
Answer: C<\/strong>
Explanation:<\/strong> Excise duty = indirect tax on manufacture of goods<\/strong>.<\/p>\n\n\n\n

19. Service tax (before GST) was a type of:<\/mark><\/strong>
A) Direct tax
B) Indirect tax
C) Wealth tax
D) Capital tax
Answer: B<\/strong>
Explanation:<\/strong> Service tax was an indirect tax<\/strong>, merged into GST.<\/p>\n\n\n\n

20. The burden of direct tax falls on:<\/mark><\/strong>
A) Producer and shifted to consumer
B) Person on whom it is imposed
C) Middleman
D) Government
Answer: B<\/strong>
Explanation:<\/strong> Direct tax cannot be shifted<\/strong> \u2192 borne by payer.<\/p>\n\n\n\n

21. The burden of indirect tax falls on:<\/mark><\/strong>
A) Person who earns income
B) Producer only
C) Consumer (final buyer)
D) Tax department
Answer: C<\/strong>
Explanation:<\/strong> Indirect tax is passed to final consumer<\/strong>.<\/p>\n\n\n\n

22. VAT (Value Added Tax) was replaced in India by:<\/mark><\/strong>
A) Service tax
B) GST
C) Corporate tax
D) Income tax
Answer: B<\/strong>
Explanation:<\/strong> VAT subsumed into Goods and Services Tax (GST)<\/strong>.<\/p>\n\n\n\n

23. Double taxation means:<\/mark><\/strong>
A) Same income taxed twice by same govt
B) Same income taxed twice by different govts
C) Both A and B
D) None
Answer: C<\/strong>
Explanation:<\/strong> Double taxation can occur within country or internationally.<\/p>\n\n\n\n

24. Which body in India recommends sharing of tax revenue between Centre and States?<\/mark><\/strong>
A) NITI Aayog
B) RBI
C) Finance Commission
D) Planning Commission
Answer: C<\/strong>
Explanation:<\/strong> Finance Commission<\/strong> recommends Centre\u2013State revenue sharing.<\/p>\n\n\n\n

25. Tax buoyancy means:<\/mark><\/strong>
A) Govt revenue increases faster than GDP
B) Govt revenue decreases with GDP
C) Govt revenue is stable irrespective of GDP
D) Govt revenue is negative
Answer: A<\/strong>
Explanation:<\/strong> Tax buoyancy shows elasticity of tax revenue w.r.t GDP growth<\/strong>.<\/p>\n\n\n\n

26. Which of the following is a direct tax in India?<\/mark><\/strong>
A) Excise duty
B) GST
C) Income tax
D) Customs duty
Answer: C<\/strong>
Explanation:<\/strong> Income tax is imposed directly on individuals, cannot be shifted.<\/p>\n\n\n\n

27. Which of the following is an indirect tax in India?<\/mark><\/strong>
A) Corporate tax
B) Income tax
C) GST
D) Wealth tax
Answer: C<\/strong>
Explanation:<\/strong> GST is levied on goods\/services \u2192 passed to consumer.<\/p>\n\n\n\n

28. Corporate tax is levied on:<\/mark><\/strong>
A) Income of individuals
B) Profits of companies
C) Importers and exporters
D) Agriculture income
Answer: B<\/strong>
Explanation:<\/strong> Corporate tax is a direct tax on company profits<\/strong>.<\/p>\n\n\n\n

29. Securities Transaction Tax (STT) in India is:<\/mark><\/strong>
A) Direct tax
B) Indirect tax
C) Wealth tax
D) Import duty
Answer: A<\/strong>
Explanation:<\/strong> STT is a direct tax on financial transactions<\/strong>.<\/p>\n\n\n\n

30. Which tax was abolished in India in 2015?<\/mark><\/strong>
A) Wealth tax
B) Income tax
C) Excise duty
D) Corporate tax
Answer: A<\/strong>
Explanation:<\/strong> Wealth tax abolished in 2015\u201316<\/strong>.<\/p>\n\n\n\n

31. Minimum Alternate Tax (MAT) is applicable to:<\/mark><\/strong>
A) Salaried individuals
B) Farmers
C) Companies showing zero profit
D) Importers
Answer: C<\/strong>
Explanation:<\/strong> MAT ensures companies with book profits pay minimum tax.<\/p>\n\n\n\n

32. Which of the following taxes is levied on capital gains?<\/mark><\/strong>
A) Income tax
B) Excise duty
C) Customs duty
D) Wealth tax
Answer: A<\/strong>
Explanation:<\/strong> Capital gains are taxed under Income Tax Act<\/strong>.<\/p>\n\n\n\n

33. Customs duty in India is levied on:<\/mark><\/strong>
A) Production
B) Income
C) Imports and exports
D) Services
Answer: C<\/strong>
Explanation:<\/strong> Customs duty = indirect tax on imports\/exports<\/strong>.<\/p>\n\n\n\n

34. Excise duty is levied on:<\/mark><\/strong>
A) Imports
B) Exports
C) Domestic production of goods
D) Agricultural income
Answer: C<\/strong>
Explanation:<\/strong> Excise duty = tax on manufacture within country<\/strong> (mostly merged into GST).<\/p>\n\n\n\n

35. Which of the following taxes is NOT subsumed under GST?<\/mark><\/strong>
A) Excise duty on petroleum
B) VAT
C) Service tax
D) Octroi
Answer: A<\/strong>
Explanation:<\/strong> GST excludes alcohol, petroleum excise duties<\/strong>.<\/p>\n\n\n\n

36. The GST Council in India is chaired by:<\/mark><\/strong>
A) Prime Minister
B) Finance Minister
C) RBI Governor
D) President
Answer: B<\/strong>
Explanation:<\/strong> The Union Finance Minister<\/strong> chairs GST Council.<\/p>\n\n\n\n

37. GST was introduced in India in:<\/strong>
<\/mark>A) 2015
B) 2017
C) 2019
D) 2020
Answer: B<\/strong>
Explanation:<\/strong> GST launched on 1 July 2017<\/strong>.<\/p>\n\n\n\n

38. Which Constitutional Amendment introduced GST?<\/strong>
<\/mark>A) 98th Amendment
B) 99th Amendment
C) 100th Amendment
D) 101st Amendment
Answer: D<\/strong>
Explanation:<\/strong> GST introduced via 101st Amendment, 2016<\/strong>.<\/p>\n\n\n\n

39. GST is levied as a:<\/strong>
<\/mark>A) Single-stage tax
B) Multi-stage value-added tax
C) Only on imports
D) Only on exports
Answer: B<\/strong>
Explanation:<\/strong> GST = multi-stage, destination-based tax<\/strong> on value addition.<\/p>\n\n\n\n

40. GST in India follows which model?<\/strong>
<\/mark>A) Dual model (Centre + States)
B) Central model only
C) State model only
D) Cooperative model without Centre
Answer: A<\/strong>
Explanation:<\/strong> India follows dual GST model<\/strong> (CGST + SGST\/UTGST + IGST).<\/p>\n\n\n\n

41. IGST in India is levied on:<\/strong>
<\/mark>A) Intra-state supply
B) Inter-state supply and imports
C) Exports only
D) Agricultural products only
Answer: B<\/strong>
Explanation:<\/strong> IGST = inter-state transactions & imports<\/strong>.<\/p>\n\n\n\n

42. Which of the following is a demerit of indirect taxes?<\/strong>
<\/mark>A) Regressive nature
B) Inflationary effect
C) Burden on poor
D) All of the above
Answer: D<\/strong>
Explanation:<\/strong> Indirect taxes can hurt poor & fuel inflation<\/strong>.<\/p>\n\n\n\n

43. Which tax is levied on inheritance?<\/strong>
<\/mark>A) Gift tax
B) Estate duty (abolished in India)
C) Capital gains tax
D) Wealth tax
Answer: B<\/strong>
Explanation:<\/strong> Estate duty existed earlier but was abolished in 1985<\/strong>.<\/p>\n\n\n\n

44. Professional tax is levied by:<\/strong>
<\/mark>A) Central government
B) State governments
C) Local bodies only
D) Finance Commission
Answer: B<\/strong>
Explanation:<\/strong> States levy professional tax<\/strong> on employment, trade, professions.<\/p>\n\n\n\n

45. Which tax is called \u201cGoods and Services Tax 2.0\u201d due to digital economy?<\/strong>
<\/mark>A) Corporate tax
B) Equalisation levy (digital tax)
C) Capital gains tax
D) Income tax
Answer: B<\/strong>
Explanation:<\/strong> Equalisation levy = tax on digital transactions<\/strong> (e.g., online ads).<\/p>\n\n\n\n

46. Which of the following is NOT a feature of a good tax system?<\/strong>
<\/mark>A) Equity
B) Simplicity
C) Arbitrary collection
D) Elasticity
Answer: C<\/strong>
Explanation:<\/strong> Tax system should be fair, simple, and elastic<\/strong>, not arbitrary.<\/p>\n\n\n\n

47. The principle of equity in taxation means:<\/strong>
<\/mark>A) Tax should be uniform for all
B) Tax burden should be according to ability to pay
C) Poor and rich pay same rate
D) Govt collects maximum revenue
Answer: B<\/strong>
Explanation:<\/strong> Equity = based on ability to pay<\/strong>.<\/p>\n\n\n\n

48. Which tax principle states that those who benefit more should pay more?<\/strong>
<\/mark>A) Benefit principle
B) Equity principle
C) Efficiency principle
D) Sacrifice principle
Answer: A<\/strong>
Explanation:<\/strong> Benefit principle = pay in proportion to benefit received<\/strong>.<\/p>\n\n\n\n

49. Which type of tax system is best for reducing inequality?<\/strong>
<\/mark>A) Proportional
B) Regressive
C) Progressive
D) Indirect
Answer: C<\/strong>
Explanation:<\/strong> Progressive taxation<\/strong> helps reduce income inequality.<\/p>\n\n\n\n

50. Laffer Curve in taxation shows relationship between:<\/strong>
<\/mark>A) GDP and tax evasion
B) Tax rate and tax revenue
C) Direct tax and indirect tax
D) Government spending and tax
Answer: B<\/strong>
Explanation:<\/strong> Laffer Curve shows optimum tax rate<\/strong> that maximizes revenue.<\/p>\n\n\n\n

51. GDP stands for:<\/strong>
<\/mark>A) Gross Domestic Price
B) Gross Domestic Product
C) General Development Plan
D) Government Development Policy
Answer: B<\/strong>
Explanation:<\/strong> GDP = Gross Domestic Product<\/strong>, the value of all final goods & services produced within a country.<\/p>\n\n\n\n

52. GDP measures:<\/strong>
<\/mark>A) Only income of government
B) Market value of all final goods and services within domestic territory
C) Money supply
D) Only exports
Answer: B<\/strong>
Explanation:<\/strong> GDP = final goods & services<\/strong> produced domestically in a year.<\/p>\n\n\n\n

53. GDP at market price includes:<\/strong>
<\/mark>A) Factor cost only
B) Indirect taxes \u2013 subsidies
C) Net factor income from abroad
D) Exports only
Answer: B<\/strong>
Explanation:<\/strong> GDP at MP = GDP at FC + Indirect taxes \u2013 Subsidies.<\/p>\n\n\n\n

54. GDP at factor cost =<\/strong>
<\/mark>A) GDP at MP + Indirect taxes \u2013 Subsidies
B) GDP at MP \u2013 Indirect taxes + Subsidies
C) GNP at MP \u2013 Depreciation
D) NNP at FC \u2013 Depreciation
Answer: B<\/strong>
Explanation:<\/strong> GDP (FC) = GDP (MP) \u2013 Indirect taxes + Subsidies.<\/p>\n\n\n\n

55. GNP (Gross National Product) =<\/strong>
<\/mark>A) GDP + Depreciation
B) GDP + Net factor income from abroad (NFIA)
C) GDP \u2013 Indirect taxes
D) NNP \u2013 Depreciation
Answer: B<\/strong>
Explanation:<\/strong> GNP = GDP + NFIA.<\/p>\n\n\n\n

56. NNP (Net National Product) =<\/strong>
<\/mark>A) GNP \u2013 Depreciation
B) GDP \u2013 Subsidies
C) NDP + NFIA
D) GNP + Depreciation
Answer: A<\/strong>
Explanation:<\/strong> NNP = GNP \u2013 Depreciation<\/strong>.<\/p>\n\n\n\n

57. NDP (Net Domestic Product) =<\/strong>
<\/mark>A) GDP + Depreciation
B) GDP \u2013 Depreciation
C) GNP \u2013 Subsidies
D) NNP \u2013 NFIA
Answer: B<\/strong>
Explanation:<\/strong> NDP = GDP \u2013 Depreciation.<\/p>\n\n\n\n

58. National Income at factor cost is also called:<\/strong>
<\/mark>A) GDP
B) NNP at factor cost
C) GNP at market price
D) Disposable income
Answer: B<\/strong>
Explanation:<\/strong> NNP at FC<\/strong> = National Income.<\/p>\n\n\n\n

59. Personal income =<\/strong>
<\/mark>A) NNP at FC \u2013 Corporate tax \u2013 Retained earnings + Transfer payments
B) GDP \u2013 Depreciation
C) NNP + Subsidies \u2013 Indirect taxes
D) Disposable income \u2013 Taxes
Answer: A<\/strong>
Explanation:<\/strong> Personal Income = NI \u2013 undistributed profits \u2013 corporate tax + transfer payments.<\/p>\n\n\n\n

60. Disposable income =<\/strong>
<\/mark>A) Personal income \u2013 Direct taxes
B) National income \u2013 Indirect taxes
C) GDP \u2013 Net exports
D) Private income \u2013 Corporate tax
Answer: A<\/strong>
Explanation:<\/strong> Disposable income = PI \u2013 personal taxes<\/strong>.<\/p>\n\n\n\n

61. Which method of GDP calculates using output of goods\/services?<\/strong>
<\/mark>A) Income method
B) Expenditure method
C) Production method (Value Added Method)
D) Nominal method
Answer: C<\/strong>
Explanation:<\/strong> Value added\/production method = total output of goods\/services.<\/p>\n\n\n\n

62. Which method of GDP calculates using wages, rent, interest, profit?<\/strong>
<\/mark>A) Expenditure method
B) Income method
C) Value-added method
D) Capital method
Answer: B<\/strong>
Explanation:<\/strong> Income method adds factor incomes<\/strong>.<\/p>\n\n\n\n

63. Expenditure method of GDP includes:<\/strong>
<\/mark>A) C + I + G + (X \u2013 M)
B) Wages + Rent + Interest + Profit
C) Consumption \u2013 Depreciation
D) Govt expenditure only
Answer: A<\/strong>
Explanation:<\/strong> GDP (Expenditure) = Consumption + Investment + Govt spending + Net exports<\/strong>.<\/p>\n\n\n\n

64. Real GDP is:<\/strong>
<\/mark>A) GDP at current prices
B) GDP at constant prices (adjusted for inflation)
C) GNP \u2013 Depreciation
D) GDP at factor cost
Answer: B<\/strong>
Explanation:<\/strong> Real GDP = GDP at base year prices<\/strong>.<\/p>\n\n\n\n

65. Nominal GDP is:<\/strong>
<\/mark>A) GDP at constant prices
B) GDP at current market prices
C) GDP at factor cost
D) GDP at PPP
Answer: B<\/strong>
Explanation:<\/strong> Nominal GDP = GDP at current year prices<\/strong>.<\/p>\n\n\n\n

66. GDP deflator =<\/strong>
<\/mark>A) (Real GDP \u00f7 Nominal GDP) \u00d7 100
B) (Nominal GDP \u00f7 Real GDP) \u00d7 100
C) Real GDP \u2013 Nominal GDP
D) GNP \u2013 Depreciation
Answer: B<\/strong>
Explanation:<\/strong> GDP deflator = (Nominal \u00f7 Real GDP) \u00d7 100.<\/p>\n\n\n\n

67. Per capita income =<\/strong>
<\/mark>A) GDP \u00f7 National income
B) NI \u00f7 Population
C) GNP \u00f7 Population
D) Disposable income \u00f7 Population
Answer: B<\/strong>
Explanation:<\/strong> PCI = National Income \/ Population<\/strong>.<\/p>\n\n\n\n

68. Which GDP concept is best for comparing living standards across countries?<\/mark><\/strong>
A) Nominal GDP
B) GDP at PPP
C) GDP at current prices
D) GDP at market price
Answer: B<\/strong>
Explanation:<\/strong> Purchasing Power Parity (PPP)<\/strong> adjusts for price levels.<\/p>\n\n\n\n

69. If GDP grows but per capita income falls, it implies:<\/mark><\/strong>
A) Population is growing faster than GDP
B) Exports are increasing
C) Government expenditure is falling
D) Inflation is zero
Answer: A<\/strong>
Explanation:<\/strong> PCI falls when population > GDP growth<\/strong>.<\/p>\n\n\n\n

70. Green GDP adjusts GDP for:<\/mark><\/strong>
A) Inflation
B) Environmental costs
C) Population growth
D) Trade deficit
Answer: B<\/strong>
Explanation:<\/strong> Green GDP = GDP \u2013 environmental degradation costs<\/strong>.<\/p>\n\n\n\n

71. Human Development Index (HDI) uses:<\/mark><\/strong>
A) GDP only
B) GDP + Literacy + Life expectancy
C) GDP at PPP only
D) Population growth rate only
Answer: B<\/strong>
Explanation:<\/strong> HDI = income (PPP), literacy, life expectancy<\/strong>.<\/p>\n\n\n\n

72. GDP excludes:<\/mark><\/strong>
A) Market value of goods
B) Services of housewives
C) Services of doctors
D) Construction activity
Answer: B<\/strong>
Explanation:<\/strong> Non-market activities (household work) excluded from GDP.<\/p>\n\n\n\n

73. GDP at constant prices is also called:<\/mark><\/strong>
A) Real GDP
B) Nominal GDP
C) NNP at MP
D) Disposable income
Answer: A<\/strong>
Explanation:<\/strong> GDP at constant prices = Real GDP<\/strong>.<\/p>\n\n\n\n

74. Which of the following will increase GDP?<\/mark><\/strong>
A) Govt expenditure on building roads
B) Household cooking at home
C) Transfer payments
D) Gifts received
Answer: A<\/strong>
Explanation:<\/strong> Only marketed production<\/strong> adds to GDP.<\/p>\n\n\n\n

75. India calculates GDP mainly using:<\/mark><\/strong>
A) Production method
B) Income method
C) Expenditure method
D) Combination of methods
Answer: D<\/strong>
Explanation:<\/strong> India uses a combination of production, income, and expenditure methods<\/strong>.<\/p>\n\n\n\n

76. In India, who publishes GDP estimates?<\/mark><\/strong>
A) RBI
B) Ministry of Finance
C) NSO (National Statistical Office)
D) NITI Aayog
Answer: C<\/strong>
Explanation:<\/strong> GDP estimates are compiled by NSO under MoSPI<\/strong>.<\/p>\n\n\n\n

77. Which base year is currently used for GDP calculation in India (as of 2023)?<\/mark><\/strong>
A) 2004\u201305
B) 2011\u201312
C) 2015\u201316
D) 2017\u201318
Answer: B<\/strong>
Explanation:<\/strong> GDP series is calculated at 2011\u201312 prices<\/strong>.<\/p>\n\n\n\n

78. India\u2019s GDP growth rate in 2022\u201323 was approximately:<\/mark><\/strong>
A) 5%
B) 6.5%
C) 7%
D) 8.5%
Answer: C<\/strong>
Explanation:<\/strong> India recorded ~7% growth<\/strong> in FY 2022\u201323.<\/p>\n\n\n\n

79. Which sector contributes the largest share of India\u2019s GDP?<\/mark><\/strong>
A) Agriculture
B) Industry
C) Services
D) Mining
Answer: C<\/strong>
Explanation:<\/strong> Services sector contributes over 50%<\/strong> of GDP.<\/p>\n\n\n\n

80. Which sector employs the largest share of population in India?<\/mark><\/strong>
A) Services
B) Industry
C) Agriculture
D) IT
Answer: C<\/strong>
Explanation:<\/strong> Agriculture employs the majority<\/strong> though its GDP share is smaller.<\/p>\n\n\n\n

81. Which tax reform introduced the concept of \u201cOne Nation, One Tax\u201d?<\/mark><\/strong>
A) VAT
B) GST
C) Service tax
D) Income tax
Answer: B<\/strong>
Explanation:<\/strong> GST unified indirect taxes under One Nation, One Tax<\/strong>.<\/p>\n\n\n\n

82. GST is described as a:<\/mark><\/strong>
A) Direct tax
B) Destination-based consumption tax
C) Origin-based tax
D) Proportional direct tax
Answer: B<\/strong>
Explanation:<\/strong> GST is levied where goods\/services are consumed (destination-based)<\/strong>.<\/p>\n\n\n\n

83. Which Indian body decides GST rates?<\/mark><\/strong>
A) RBI
B) GST Council
C) Finance Commission
D) Ministry of Finance alone
Answer: B<\/strong>
Explanation:<\/strong> GST Council chaired by Union Finance Minister<\/strong> decides rates.<\/p>\n\n\n\n

84. Which of the following is NOT included in GST in India?<\/mark><\/strong>
A) Petroleum products
B) Automobiles
C) Electronics
D) Textiles
Answer: A<\/strong>
Explanation:<\/strong> Petroleum, alcohol, electricity<\/strong> are currently outside GST.<\/p>\n\n\n\n

85. Income from agriculture in India is taxed by:<\/mark><\/strong>
A) Union Government
B) State Governments
C) Both Union & States
D) Not taxed at all
Answer: B<\/strong>
Explanation:<\/strong> Agriculture income is state subject<\/strong> for taxation.<\/p>\n\n\n\n

86. The \u201cTax-to-GDP ratio\u201d measures:<\/mark><\/strong>
A) Govt revenue from exports
B) Share of tax revenue in GDP
C) Per capita income growth
D) Fiscal deficit as % of GDP
Answer: B<\/strong>
Explanation:<\/strong> Tax-to-GDP ratio = tax revenue \u00f7 GDP \u00d7 100<\/strong>.<\/p>\n\n\n\n

87. India\u2019s tax-to-GDP ratio (combined Centre & States) is around:<\/strong>
<\/mark>A) 5%
B) 10\u201312%
C) 15\u201318%
D) 25%
Answer: C<\/strong>
Explanation:<\/strong> India\u2019s ratio is ~17%<\/strong> (lower than advanced economies).<\/p>\n\n\n\n

88. Which is the single largest source of tax revenue for the Indian government?<\/strong>
<\/mark>A) Personal income tax
B) Corporate tax
C) GST
D) Customs duty
Answer: C<\/strong>
Explanation:<\/strong> GST<\/strong> is the largest contributor to tax revenues.<\/p>\n\n\n\n

89. Which tax is most effective in reducing inequality?<\/strong>
<\/mark>A) GST
B) Corporate tax
C) Progressive income tax
D) Customs duty
Answer: C<\/strong>
Explanation:<\/strong> Progressive income tax<\/strong> targets higher earners.<\/p>\n\n\n\n

90. In India, \u201cFiscal federalism\u201d in taxation is managed by:<\/strong>
<\/mark>A) RBI
B) Finance Commission
C) GST Council
D) Both B and C
Answer: D<\/strong>
Explanation:<\/strong> Finance Commission + GST Council<\/strong> handle centre\u2013state revenue sharing.<\/p>\n\n\n\n

91. The term \u201cFiscal drag\u201d refers to:<\/strong>
<\/mark>A) Fall in exports due to taxation
B) Increase in tax burden due to inflation without change in tax rate
C) Reduction in subsidies
D) Delayed fiscal deficit correction
Answer: B<\/strong>
Explanation:<\/strong> Inflation pushes people into higher tax slabs \u2192 fiscal drag<\/strong>.<\/p>\n\n\n\n

92. Which country first introduced GDP as a measure of national output?<\/strong>
<\/mark>A) UK
B) USA
C) Germany
D) France
Answer: B<\/strong>
Explanation:<\/strong> USA economist Simon Kuznets<\/strong> pioneered GDP in 1934.<\/p>\n\n\n\n

93. The concept of \u201cGross Value Added (GVA)\u201d is related to:<\/strong>
<\/mark>A) Banking
B) GDP measurement
C) Taxation
D) Exports
Answer: B<\/strong>
Explanation:<\/strong> GVA measures contribution of each sector to GDP<\/strong>.<\/p>\n\n\n\n

94. In India, GVA is measured at:<\/strong>
<\/mark>A) Basic prices
B) Market prices
C) Factor cost
D) Constant prices only
Answer: A<\/strong>
Explanation:<\/strong> India reports GVA at basic prices<\/strong>.<\/p>\n\n\n\n

95. Which is broader, GDP or GNP?<\/strong>
<\/mark>A) GDP
B) GNP
C) Both equal
D) None
Answer: B<\/strong>
Explanation:<\/strong> GNP = GDP + NFIA \u2192 broader than GDP.<\/p>\n\n\n\n

96. If GDP = \u20b9200 lakh crore and population = 140 crore, per capita income =<\/strong>
<\/mark>A) \u20b920,000
B) \u20b91,42,857
C) \u20b91,50,000
D) \u20b92,00,000
Answer: B<\/strong>
Explanation:<\/strong> PCI = 200 lakh crore \u00f7 140 crore = \u20b91.43 lakh approx.<\/strong><\/p>\n\n\n\n

97. Which of the following is excluded from GDP?<\/strong>
<\/mark>A) Sale of new car
B) Purchase of shares in stock market
C) Govt spending on defence
D) Exports of IT services
Answer: B<\/strong>
Explanation:<\/strong> Financial transactions like share trading<\/strong> do not add to GDP.<\/p>\n\n\n\n

98. If Nominal GDP grows by 10% and inflation is 6%, Real GDP growth is:<\/strong>
<\/mark>A) 4%
B) 6%
C) 10%
D) 16%
Answer: A<\/strong>
Explanation:<\/strong> Real GDP = Nominal GDP growth \u2013 Inflation = 10 \u2013 6 = 4%<\/strong>.<\/p>\n\n\n\n

99. Which institution releases India\u2019s Economic Survey annually?<\/strong>
<\/mark>A) RBI
B) Ministry of Finance
C) NITI Aayog
D) NSO
Answer: B<\/strong>
Explanation:<\/strong> Finance Ministry<\/strong> presents Economic Survey before Budget.<\/p>\n\n\n\n

100. India became the world\u2019s ____ largest economy in nominal GDP terms (2023).<\/strong>
<\/mark>A) 2nd
B) 3rd
C) 5th
D) 7th
Answer: C<\/strong>
Explanation:<\/strong> India is the 5th largest economy (Nominal GDP)<\/strong>, after US, China, Japan, Germany.<\/p>\n","protected":false},"excerpt":{"rendered":"

1. Tax is a:A) Voluntary payment to governmentB) Compulsory payment without direct benefitC) Fee for services renderedD) Donation to governmentAnswer: BExplanation: Tax is a compulsory payment imposed by govt with no direct quid pro quo. 2. 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