Q1. Which of the following is an example of Regressive Taxation?
A) A tax where the rich pay a higher percentage of income
B) GST on luxury yachts
C) A flat customs duty of 10% on both onions and iPhones
D) Corporate income tax at progressive slabs
Correct Answer: C
Explanation: When the same tax rate is imposed on essentials and luxuries, the burden falls proportionally more on the poor → regressive in effect.
Q2.The concept of Income Terms of Trade, Single Factoral Terms of Trade and Double Factoral Terms of Trade was refined and classified by:
A) Jacob Viner
B) G.S. Dorrance
C) Taussig
D) D.H. Robertson
Correct Answer: A
Explanation: Jacob Viner formally classified various forms of Terms of Trade—a highly ignored static fact.
Q3.Arrange the following in the correct chronological order of first major exposition:
- Quantity Theory of Money (modern version)
- Cambridge Cash-Balance Approach
- Keynesian Liquidity Preference Theory
- Friedman’s Restatement of Quantity Theory
A) 1 → 2 → 3 → 4
B) 2 → 1 → 3 → 4
C) 1 → 3 → 2 → 4
D) 2 → 3 → 1 → 4
Correct Answer: A
Explanation:
- Fisher (Modern QTM) → Cambridge economists → Keynes → Friedman (1956).
Q4.Under which of the following conditions will the Multiplier be the highest?
A) High MPC, low MPM, low tax rate
B) Low MPC, high MPM
C) High tax rate, high MPS
D) Closed economy with high marginal propensity to invest
Correct Answer: A
Explanation:
Open economy multiplier:
1 / (s + m + t)
Lowest leakages ⇒ highest multiplier value.
Q5. The “Lewis Turning Point” refers to:
A) The point where surplus labour in the traditional sector is exhausted
B) The point where capitalist sector stops expanding
C) When wages in the traditional sector start rising
D) Both (A) and (C)
Correct Answer: D
Explanation:
- At the turning point, surplus labour is exhausted and
- Wages in traditional sector start rising due to labour scarcity.
