A decrease in tax to GDP ratio of a country indicates which of the following? 1. Slowing economic growth rates 2. Less equitable distribution of national income Select the correct answer using the code given below.

examrobotsa's picture

Submitted by examrobotsa on

Q: 54 (IAS/2015)
A decrease in tax to GDP ratio of a country indicates which of the following?
1. Slowing economic growth rates
2. Less equitable distribution of national income
Select the correct answer using the code given below.

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,73,212,73,68,95,49

keywords: 

{'gdp ratio': [0, 0, 0, 1], 'economic growth rates': [0, 0, 0, 1], 'decrease': [0, 0, 0, 1], 'national income': [0, 2, 2, 4], 'tax': [0, 0, 0, 1]}

You are correct. A decrease in the tax-to-GDP ratio of a country typically indicates slowing economic growth rates. A lower tax-to-GDP ratio means that the government is collecting a smaller share of the overall economic output in the form of taxes, which can be an indication of a slowdown in economic activity. It does not necessarily imply anything about the equitable distribution of national income. So, the correct answer is 1 only.