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A question regarding tax-gdp rato

Gravityblast
Posts: 1
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9/25/2015 11:08:52 AM
Posted: 1 year ago
A decrease in tax to GDP ratio of a country indicates which of the following?
1. Slowing economic growth rate
2. Less equitable distribution of national income
Select the correct answer using the code given below.
(a) I only
(b) 2 only
(c) Both 1 and 2
(d) Neither I nor 2
Dazz
Posts: 1,163
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10/6/2015 11:23:34 AM
Posted: 1 year ago
At 9/25/2015 11:08:52 AM, Gravityblast wrote:
A decrease in tax to GDP ratio of a country indicates which of the following?
1. Slowing economic growth rate
2. Less equitable distribution of national income
Select the correct answer using the code given below.
(a) I only
(b) 2 only
(c) Both 1 and 2
(d) Neither I nor 2

Decrease in tax-to-GDP ratio may occur in 3 cases;
A) if GDP increased whereas tax %age remained the same.
B) Tax %age increased whereas GDP remained the same (i.e 0% growth).
C) Tax growth is less than GDP growth.

So I think answer is d.
Remove the "I want", remainder is the "peace". ~Al-Ghazali~
"This time will also pass", a dose to cure both; the excitement & the grievance. ~Ayaz~
Dazz
Posts: 1,163
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10/6/2015 11:24:52 AM
Posted: 1 year ago
B) Tax %age decreased whereas GDP remained the same (i.e 0% growth).
*Correction
Remove the "I want", remainder is the "peace". ~Al-Ghazali~
"This time will also pass", a dose to cure both; the excitement & the grievance. ~Ayaz~