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      Question

      ā€˜Fiscal Drag’ expresses the impact of inflation on

      which of the following?
      A Fiscal Deficit Correct Answer Incorrect Answer
      B Tax Revenue and GDP Correct Answer Incorrect Answer
      C Black money Correct Answer Incorrect Answer
      D Investment Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Fiscal drag is an economics term referring to a situation where a government’s net fiscal position (equal to its spending less any taxation) does not meet the net savings goals of the private economy. Fiscal drag is a concept where inflation and earnings growth may push more taxpayers into higher tax bracket.

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