To prepare this section aspirants are suggested to understand basic economics terms, encountered daily in news papers or magazines, well. Government programmes, policies and schemes should also be read carefully as the section gives considerable importance to these aspects.
1. Which one of the following is not a feature of "Value Added Tax" ?
(a) It is a multi-point destination-based system of taxation
(b) It is a tax levied on value addition at each stage of transaction in the production-distribution chain
(c) It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer
(d) It is basically a subject of the Cental Government and the State Governments are only a facilitator for its successful implementation
2. A "closed economy" is an economy in which
(a) the money supply is fully controlled
(b) deficit financing takes place
(c) only exports take place
(d) neither exports nor imports take place