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प्रश्न
Explain how indirect taxes can be inflationary.
Explain how indirect taxes prove to be inflationary.
थोडक्यात उत्तर
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उत्तर
- Indirect taxes are known to cause significant inflation. Indirect taxes on commodities lead to higher market prices.
- Rising prices increase the cost of living, leading trade unions to seek greater salaries to maintain workers' real incomes.
- Indirect taxes perpetuate a cycle of rising prices, costs, wages, and further price increases.
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संबंधित प्रश्न
Observe the relationship of the first pair of words and complete the second pair:
Tax paid by person on whose it is imposed : Direct tax.
A tax is paid by some person and the final burden is born by some other person : ______.
Match the following:
| Column I | Column II | ||
| A. | Direct tax | (i) | Tax rate increases with tax base |
| B. | Indirect tax | (ii) | Tax rate remains constant |
| C. | Proportional tax | (iii) | Imposed on goods and services |
| D. | Progressive tax | (iv) | Impact and incidence lie on the same person |
Define fiscal policy.
An indirect tax is not always equitable. Give two reasons to support your answer.
Explain the term proportional taxation.
Give two reasons why the government imposes tax?
Draw a neat labelled diagram for progressive taxation.
State the four merits of a direct tax.
Three demerits of an Indirect tax.
Give two examples of direct taxes.
