Q15 of 39 Page 1

What do you mean by a direct tax?

OR


What do you mean by an indirect tax?


When the liability to pay the tax and the burden of the tax lies on the same person it is said to be a form of the direct tax. For example, income tax and corporate tax. The burden of such taxes cannot be shifted to others.

OR


When the liability to pay the tax and the burden of the tax lies on different people it is said to be a form of the indirect tax. For example, Goods and services tax. The burden of such taxes can easily be shifted to others.


More from this chapter

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13

Primary deficit in a government budget will be zero, when ___________ . (Choose the correct alternative)

 14

In order to encourage investment in the economy, the Central Bank may

___________. (Choose the correct alternative)


(a) Reduce Cash Reserve Ratio


(b) Increase Cash Reserve Ratio


(c) Sell Government securities in open market


(d) Increase Bank Rate


 16

Define ‘money multiplier’.

 17

Calculate the change in final income, if Marginal Propensity to Consume (MPC) is 0 �8 and change in initial investment is < 1,000 crores.