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Question
Explain the significance of taxes.
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Solution
- Taxes are helpful in regulating the level of economic activity.
- They help in reducing inequalities of income and wealth.
- They provide resources for economic development.
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RELATED QUESTIONS
Monetary policy means regulation of money supply by the monetary authority.
The following table indicates:
| Tax Base in ₹ | Rate of tax in % |
| 10,000 | 8 |
| 20,000 | 8 |
| 30,000 | 8 |
| 40,000 | 8 |
Which of the statement is true for income tax?
Match the following:
| Column I | Column II | ||
| A. | Impact of tax | (i) | Price stability |
| B. | Incidence of tax | (ii) | Simple to calculate |
| C. | Objective of Monetary Policy | (iii) | Ultimate burden of tax |
| D. | Proportional tax | (iv) | Original imposition of tax |
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Reason (R): GST is an indirect tax.
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To which tax is this shifting of tax burden relevant?
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Environmental protection.
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