Question

A decrease in the tax to GDP ratio indicates which of the following:

  1. Slowing economic growth rate

  2. Less equitable distribution of national income

Select the correct answer using the code given below:

A 1 only Correct Answer Incorrect Answer
B 2 only Correct Answer Incorrect Answer
C Both 1 and 2 Correct Answer Incorrect Answer
D Neither 1 nor 2 Correct Answer Incorrect Answer
E Insufficient information Correct Answer Incorrect Answer

Solution

Tax to GDP ratio shows growth in the economy not the distribution of income. hence, statement 2 is incorrect.

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