CUET Economics 2025 Slot 6 Past Year Paper with Solutions

Q1:

Macro

>

Income & Employment

Medium

The aggregate demand curve of an economy is parallel to X axis. What will be the value of investment multiplier in this economy?

one.

zero.

infinity.

Between 1 and infinity.

Correct Answer

Option 1

Correct Answer

Explanation

Q2:

Macro

>

Income & Employment

Medium

A hypothetical economy tends to save only 25% of its additional income. How much additional income would be generated by it if the investment is increased by 50 crores?

50 crores.

100 crores.

200 crores.

250 crores.

Correct Answer

Option 3

Correct Answer

Explanation

Q3:

Macro

>

Income & Employment

Medium

Match List-I with List-II

List-I	List-II
(A) Effective demand	(I) National Income
(B) Say's law of markets	(II) Aggregate demand exceeds aggregate supply at full employment
(C) Inflationary gap	(III) Supply creates its own demand
(D) Aggregate supply	(IV) Aggregate demand at equilibrium level

Choose the correct answer from the options given below:

(A) - (IV), (B) - (III), (C) - (II), (D) - (I)

(A) - (II), (B) - (III), (C) - (IV), (D) - (I)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (III), (C) - (IV), (D) - (II)

Correct Answer

Option 1

Correct Answer

Explanation

Q4:

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Budget line	(I) $-\frac{p_1}{p_2}$
(B) Budget constraint	(II) Bundles available to the consumer
(C) Budget set	(III) $p_1X_1 + p_2X_2 = M$
(D) Slope of budget line	(IV) $p_1X_1 + p_2X_2 \leq M$

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (II), (B) - (III), (C) - (IV), (D) - (I)

(A) - (III), (B) - (II), (C) - (IV), (D) - (I)

(A) - (III), (B) - (IV), (C) - (II), (D) - (I)

Correct Answer

Option 4

Correct Answer

Explanation

Q5:

Micro

>

Consumer Behaviour

Medium

Arun spends 200 rupees on good X irrespective of its price whereas Varun buys 10 units of Good X irrespective of its price. The respective values of the price elasticity of demand for Good X for both the consumers is

0 and 1 respectively.

1 and 0 respectively.

0 for both the consumers.

less than 1 for Arun and More than 1 for Varun.

Correct Answer

Option 2

Correct Answer

Explanation

Q6:

Macro

>

Balance of Payments

Medium

Under __________ system, the central bank intervenes to buy and sell foreign currencies in an attempt to moderate exchange rate movements whenever they feel that such actions are appropriate.

Fixed exchange rate.

Flexible exchange rate.

Managed floating.

Gold Standard.

Correct Answer

Option 3

Correct Answer

Explanation

Q7:

Macro

>

National Income

Medium

Which of the following are true about national income and related aggregates?

(A) National income includes factor income earned from abroad but does not include factor income paid abroad.

(B) Domestic income does not include factor income earned from abroad but includes factor income paid to abroad

(C) Domestic income include both factor income earned from abroad and factor income paid to abroad

(D) National income can never be smaller than domestic Income.

Choose the correct answer from the options given below:

(A) and (B) only

(A) and (C) only

(A), (C) and (D) only

(B) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q8:

Macro

>

National Income

Medium

Arrange the following in order as per Income method of measuring national Income.

(A) Classifying the production units into primary, secondary and tertiary sector on the basis of their occupational activities

(B) Adding the net factor income from abroad.

(C) Determination of domestic income.

(D) Finding the factor payments made by each production unit and classifying it into compensation of employees, operating surplus and mixed income.

Choose the correct answer from the options given below:

(A), (D), (C), (B)

(A), (C), (B), (D)

(B), (A), (D), (C)

(A), (C), (D), (B)

Correct Answer

Option 1

Correct Answer

Explanation

Q9:

Macro

>

Money & Banking

Easy

Rajesh is a weaver and is looking for food for his family. He approaches Shyam who is a farmer and offers to exchange clothes in return for wheat. However, Shyam says that his family needs shoes, not clothes. Which shortcoming of the barter system is being highlighted in this case?

Lack of double coincidence of wants.

Lack of common measure of value.

Problem in storing the value

Lack of standard for deferred payments.

Correct Answer

Option 1

Correct Answer

Explanation

Q10:

Macro

>

Money & Banking

Easy

If the central bank purchases the government securities from the commercial banks, it is likely to

Increase the money supply in the economy.

Reduce the money supply in the economy.

Decrease the demand of people.

Leaves the money supply in the economy unaffected.

Correct Answer

Option 1

Correct Answer

Explanation

Q11:

Macro

>

Income & Employment

Medium

In a hypothetical economy, the consumption function is given as C = 100 + 0.75Y. The autonomous investment in the economy is 200 crores. The equilibrium level of income would be______?

1200 crores

1500 crores

1800 crores

2000 crores

Correct Answer

Option 1

Correct Answer

Explanation

Q12:

Macro

>

Money & Banking

Medium

An economy is facing inflationary pressures and the central bank of the country has been asked to control the situation. Arrange the action and result in sequential order.

(A) Credit has become costlier and people stop borrowing.

(B) Increase in Repo rate by the central bank.

(C) Reduction in the money supply and aggregate demand falls.

(D) Increase in the market lending rate by commercial banks.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (D), (C), (A)

(B), (D), (A), (C)

Correct Answer

Option 4

Correct Answer

Explanation

Q13:

Micro

>

Forms of Market

Easy

In perfectly competitive market, the demand curve of a firm is?

Perfectly inelastic.

Unit elastic.

More than unit elastric.

Perfectly elastic.

Correct Answer

Option 4

Correct Answer

Explanation

Q14:

Micro

>

Production & Costs

Medium

Manoj is a seller in a market where more can be sold only by lowering the price of the goods. Which of the following will be true about his revenue.

(A) Total revenue will increase at a constant rate.

(B) Average revenue will be more than his marginal revenue at all the levels of output sold.

(C) Marginal revenue curve will be downward sloping from left to the right.

(D) Marginal revenue can be zero at some level of output sold.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 4

Correct Answer

Explanation

Q15:

Micro

>

Consumer Behaviour

Medium

The income of a consumer is spent by him on two goods X and Y. The marginal utility of the goods at the present level of consumption are equal to each other. However, the price of good X is double that of good Y. The consumer, in order to attain equilibrium, will

Increase the consumption of X and decrease the consumption of Y.

Increase the consumption of Y and decrease the consumption of X.

Increase the consumption of X without changing the consumption of Y.

Keep his consumption level constant as he is already operating at equilibrium.

Correct Answer

Option 2

Correct Answer

Explanation

Q16:

Micro

>

Production & Costs

Medium

Which of the following is/are true about the short run costs?

(A) Marginal cost is the slope of total variable cost.

(B) Average fixed cost curve is a downward sloping rectangular hyperbola.

(C) Average variable cost curve is a U shaped curve.

(D) Average variable cost curve and average cost curve are parallel to each other.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(B), (C) and (D) only

(A), (B), (C) and (D)

(A), (B) and (C) only

Correct Answer

Option 4

Correct Answer

Explanation

Q17:

Macro

>

Income & Employment

Medium

Match List-I with List-II

List-I	List-II
(A) Marginal propensity to save	(I) Slope of consumption function
(B) Marginal propensity to consume	(II) Value is 1 at the break even point of the economy
(C) Investment Multiplier	(III) Reciprocal of marginal propensity to save
(D) Average propensity to consume	(IV) 1- c

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (IV), (B) - (III), (C) - (I), (D) - (II)

(A) - (IV), (B) - (I), (C) - (III), (D) - (II)

Correct Answer

Option 4

Correct Answer

Explanation

Q18:

Macro

>

Balance of Payments

Medium

Suppose that government bonds in country A pay 8 per cent rate of interest whereas equally safe bonds in country B yield 10 per cent. The interest rate differential is 2 per cent. Arrange the consequences of the same in sequential order.

(A) People will find investing in country B more attractive and will therefore demand less of country A's currency.

(B) Depreciation of country A's currency and an appreciation of country B's currency.

(C) Investors from country A will be attracted by the high interest rates in country B and will buy the currency of country B selling currency of country A.

(D) The demand curve for country A's currency will shift to the left and the supply curve will shift to the right.

Choose the correct answer from the options given below:

(C), (A), (D), (B)

(B), (C), (A), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 1

Correct Answer

Explanation

Q19:

Micro

>

Consumer Behaviour

Medium

Good X and Y are considered to be substitutes by a consumer. He is currently consuming good X. If the price of Good Y decreases, then arrange the following in correct sequence.

(A) Demand for Good X decreases.

(B) Consumer finds Good Y to be relatively cheaper than Good X.

(C) Demand curve for Good X shifts to the left.

(D) Consumer shifts from Good X to Good Y.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(B), (D), (A), (C)

Correct Answer

Option 4

Correct Answer

Explanation

Q20:

Micro

>

Production & Costs

Medium

Which of the following is true about the law of variable proportions?

(A) Total product eventually declines.

(B) Average product is an inverse U shaped curve.

(C) Marginal product becomes equal to Average product at its minimum.

(D) Marginal product can never be negative.

Choose the correct answer from the options given below:

(A) and (B) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(A), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q21:

Micro

>

Production & Costs

Medium

If the supply curve of a good cuts the price axis in its positive range and as we extend the straight line, it cuts the quantity-axis at its negative range, the elasticity of supply for the good will be:

Less than 1.

Equal to 1.

More than 1.

Not defined (infinity).

Correct Answer

Option 3

Correct Answer

Explanation

Q22:

Micro

>

Production & Costs

Easy

At the present level of production, the marginal revenue exceeds the marginal cost of production. In order to attain equilibrium, the producer should___

Increase the level of output.

Decrease the level of output.

Should keep the output level constant.

Should reduce the price of the product.

Correct Answer

Option 1

Correct Answer

Explanation

Q23:

Macro

>

National Income

Medium

What is required to be added to Net National Product at market prices to obtain National Disposable Income?

Current transfers to the rest of the world

Profits of the firm net of corporate taxes

Other current transfers from the rest of the world

profits of the firm net of retained earnings

Correct Answer

Option 3

Correct Answer

Explanation

Q24:

Micro

>

Production & Costs

Medium

If the marginal rate of transformation is constant throughout, the production Possibilities Frontier will be

Downward sloping and concave to the origin.

Downward sloping and convex to the origin.

Downward sloping and linear.

Upward sloping straight line.

Correct Answer

Option 3

Correct Answer

Explanation

Q25:

Macro

>

Income & Employment

Medium

At the present level of employment in a hypothetical economy, the aggregate demand is falling short of aggregate supply. What will be the likely change in the level of national income of this economy?

National income is likely to rise.

National income is likely to fall.

The economy is already at equilibrium so there will be no change in national income.

The income initially rises and then falls.

Correct Answer

Option 2

Correct Answer

Explanation

Q26:

Macro

>

Money & Banking

Medium

If the required reserve ratio in an economy is 12.5%, the initial cash deposits of ₹2000 will increase the money supply by ______.

₹ 12500

₹16000

₹20000

₹25000

Correct Answer

Option 2

Correct Answer

Explanation

Q27:

Macro

>

Income & Employment

Medium

In an economy, the consumption curve and saving curve are parallel to each other. What will be the value of investment multiplier in this economy?

1

2

5

infinity

Correct Answer

Option 2

Correct Answer

Explanation

Q28:

Micro

>

Consumer Behaviour

Medium

Match List-I with List-II

List-I	List-II
(A) Increase in consumers' income	(I) Budget line becomes flatter
(B) Decrease in price of good on X axis	(II) No change in the slope of budget line
(C) Equal increase in price of both good X and good Y	(III) Parallel and rightward shift in their budget line
(D) Decrease in Price of the good on Y axis	(IV) Budget line becomes steeper

Choose the correct answer from the options given below:

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (III), (B) - (I), (C) - (II), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (II), (D) - (I)

Correct Answer

Option 2

Correct Answer

Explanation

Q29:

Micro

>

Market Equilibrium

Medium

A hurricane in some parts of the country destroyed a major part of the onion crop. Arrange the chain effects of the same on onion market in proper sequence.

(A) There will be upward pressure on the price of onions.

(B) The buyers will compete in order to get onions in the market.

(C) Demand contracts and supply expands until the market achieves a new equilibrium.

(D) The market supply of onions decreases, leading to excess demand for the same.

Choose the correct answer from the options given below:

(A), (B), (D), (C)

(A), (D), (B), (C)

(D), (A), (B), (C)

(D), (B), (A), (C)

Correct Answer

Option 4

Correct Answer

Explanation

Q30:

Micro

>

Introduction

Easy

Which of the following central problems deal with the distribution of final goods and services?

What to produce?

How to produce?

For whom to produce?

Economising of resources

Correct Answer

Option 3

Correct Answer

Explanation

Q31:

Macro

>

Balance of Payments

Medium

Which of the following items will be recorded in the capital account of the Balance of Payments account?

Net investment income.

Gifts, grants and remittances.

Net income from compensation of employees.

Offshore funds.

Correct Answer

Option 4

Correct Answer

Explanation

Q32:

Macro

>

Balance of Payments

Medium

Under the fixed exchange rate regime, if the government of a country finds its currency to be overvalued and therefore deliberately reduces the value of its current against the foreign currency, it will be called as?

Depreciation of domestic currency.

Appreciation of domestic currency.

Devaluation of domestic currency.

Revaluation of domestic currency.

Correct Answer

Option 3

Correct Answer

Explanation

Q33:

Micro

>

Consumer Behaviour

Medium

The equation of demand curve of a good for a consumer is given to be $p\times q = e$ where e is a constant. What will be the shape of the demand curve?

Parallel to x axis.

Parallel to y axis.

Downward sloping rectangular hyperbola.

Downward sloping straight line forming and angle of 135° with x axis.

Correct Answer

Option 3

Correct Answer

Explanation

Q34:

Macro

>

National Income

Medium

Which of the following is not an intermediate good?

Chalks used in a private school.

Seeds used by a farmer.

Rice purchased from a grocery store by a restaurant

Car used as a taxi by a person

Correct Answer

Option 4

Correct Answer

Explanation

Q35:

Macro

>

National Income

Medium

Which of the following are stock variable(s)?

(A) Population

(B) Capital formation

(C) Number of students in a school

(D) Change in inventories

Choose the correct answer from the options given below:

(B) and (C) only

(A), (B) and (D) only

(A) and (B) only

(A) and (C) only

Correct Answer

Option 4

Correct Answer

Explanation

Q36:

Macro

>

National Income

Medium

If the National income of a country is ₹4000 million, the consumption of fixed capital is ₹200 million, Gross national product at market price is ₹5000 million and subsidies are ₹100 million, what will be the amount of Indirect taxes?

₹700 million

₹800 million

₹900 million

₹1000 million

Correct Answer

Option 3

Correct Answer

Explanation

Q37:

Macro

>

National Income

Hard

Match List-I with List-II

List-I	List-II
(A) GNP at Market price	(I) $GDP_{MP}$ + NFIA
(B) GDP at Market price	(II) NI - Undistributed profits - Net interest payments made by households - Corporate tax + Transfer payments to the households from the government and firms
(C) Personal income	(III) C + I + G + X - M
(D) Private income	(IV) Factor income from net domestic product accruing to the private sector + National debt interest + Net factor income from abroad + Current transfers from government + Other net transfers from the rest of the world

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (III), (B) - (I), (C) - (II), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (IV), (C) - (III), (D) - (II)

Correct Answer

Option 3

Correct Answer

Explanation

Q38:

Macro

>

Balance of Payments

Medium

The Indian government imports 22 Rafael planes from France. In which sub-account and on which side of the Balance of Payments account this transaction will be recorded?

Current account on the debit side.

Current account on the credit side.

Capital account on the debit side.

Capital account on the credit side.

Correct Answer

Option 1

Correct Answer

Explanation

Q39:

Micro

>

Consumer Behaviour

Medium

In the cardinal utility analysis, the marginal utility of money is considered to be

Constant.

Decreasing.

Increasing.

First decreasing and then increasing.

Correct Answer

Option 1

Correct Answer

Explanation

Q40:

Macro

>

Money & Banking

Easy

Currency notes and coins are termed as ________.

Fiduciary money.

Intrinsic value money.

Non legal tender money.

Fiat money.

Correct Answer

Option 4

Correct Answer

Explanation

Q41:

Micro

>

Market Equilibrium

Easy

Comprehension:

FLOOR PRICES

For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.

The market determined price of a good is Rs. 40.The government fixes the minimum price of the good as Rs. 50. Calculate the excess demand/excess supply it will cause if the demand and supply functions are Qd = 200 – p and Qs = 120 + p respectively.

Excess demand of 20 units.

Excess supply of 20 units.

Excess demand for 50 units.

Excess supply of 30 units.

Correct Answer

Option 2

Correct Answer

Explanation

Q42:

Micro

>

Market Equilibrium

Easy

Comprehension:

FLOOR PRICES

For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.

Floor prices are meant for the welfare of

Consumers.

Producers.

Both consumers and producers.

Government.

Correct Answer

Option 2

Correct Answer

Explanation

Q43:

Micro

>

Market Equilibrium

Medium

Comprehension:

FLOOR PRICES

For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.

Imposition of price floors usually lead to following

Excess demand.

Excess supply.

Shortage of goods in the market.

Determination of market equilibrium.

Correct Answer

Option 2

Correct Answer

Explanation

Q44:

Micro

>

Market Equilibrium

Easy

Comprehension:

FLOOR PRICES

For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.

To be effective, the floor price should be determined

Lesser than the market determined price.

More than the market determined price.

Equal to the market determined price.

either lesser or more than the market determined price but not equal to it.

Correct Answer

Option 2

Correct Answer

Explanation

Q45:

Micro

>

Market Equilibrium

Easy

Comprehension:

FLOOR PRICES

For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.

The market determined wage rate is $500 per month whereas the minimum wage fixed by the government is $$450 per month. As a result of this government intervention,

The wage rate will fall.

The wage rate will rise.

The wage rate will remain unaffected.

Unemployment will increase.

Correct Answer

Option 3

Correct Answer

Explanation

Q46:

Macro

>

Government Budget

Medium

Comprehension:

GST: One Nation, One Tax, One Market

GST is the biggest tax reform in the country since independence and was rolled out on the mid-night of 30 June/1 July, 2017 during a special midnight session of the Parliament. The 101th Constitution Amendment Act received assent of the President of India on 8 September, 2016. The amendment introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. Thereafter CGST Act, UTGST Act and SGST Acts were enacted for GST. GST has simplified the multiplicity of taxes on goods and services. The laws, procedures and rates of taxes across the country are standardised. It has facilitated the freedom of movement of goods and services and created a common market in the country. It is aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets. It will also result into higher economic growth as GDP is expected to rise by about 2%. Compliance will also be easier as all tax payment related services like registration, returns, payments are available online through a common portal www.gst.gov.in. It has expanded the tax base, introduced higher transparency in the taxation system, reduced human interface between Taxpayer and Government and is furthering ease of doing business.

However, certain products have been kept out of the ambit of GST for the time being. Alcohol for human consumption continues to be taxed under the State Excise duty framework and is not covered by GST. Similarly, five petroleum products — namely crude oil, petrol, diesel, natural gas, and aviation turbine fuel (ATF) — have been temporarily kept outside the GST regime and continue to be subject to the existing central and state tax structures until the GST Council decides to bring them under GST. Tobacco and tobacco products, on the other hand, are covered under GST at the highest slab rate of 28%, along with an additional compensation cess levied on top of it.

Suppose, a laptop has been purchased by Aman, a resident of Delhi from AX computers Pvt Ltd based in Gurugram, Haryana. Which type of GST will be levied on the laptop sold?

CGST only.

SGST only.

IGST only.

No GST will be levied as laptops are kept outside the ambit of GST.

Correct Answer

Option 3

Correct Answer

Explanation

Q47:

Macro

>

Government Budget

Medium

Comprehension:

GST: One Nation, One Tax, One Market

GST is the biggest tax reform in the country since independence and was rolled out on the mid-night of 30 June/1 July, 2017 during a special midnight session of the Parliament. The 101th Constitution Amendment Act received assent of the President of India on 8 September, 2016. The amendment introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. Thereafter CGST Act, UTGST Act and SGST Acts were enacted for GST. GST has simplified the multiplicity of taxes on goods and services. The laws, procedures and rates of taxes across the country are standardised. It has facilitated the freedom of movement of goods and services and created a common market in the country. It is aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets. It will also result into higher economic growth as GDP is expected to rise by about 2%. Compliance will also be easier as all tax payment related services like registration, returns, payments are available online through a common portal www.gst.gov.in. It has expanded the tax base, introduced higher transparency in the taxation system, reduced human interface between Taxpayer and Government and is furthering ease of doing business.

However, certain products have been kept out of the ambit of GST for the time being. Alcohol for human consumption continues to be taxed under the State Excise duty framework and is not covered by GST. Similarly, five petroleum products — namely crude oil, petrol, diesel, natural gas, and aviation turbine fuel (ATF) — have been temporarily kept outside the GST regime and continue to be subject to the existing central and state tax structures until the GST Council decides to bring them under GST. Tobacco and tobacco products, on the other hand, are covered under GST at the highest slab rate of 28%, along with an additional compensation cess levied on top of it.

Which of the following taxes is a tax levied by the state governments that has been subsumed under GST?

Value Added Tax.

Custom Duty.

Central Excise Duty.

Central Sales Tax.

Correct Answer

Option 1

Correct Answer

Explanation

Q48:

Macro

>

Government Budget

Medium

Comprehension:

GST: One Nation, One Tax, One Market

GST is the biggest tax reform in the country since independence and was rolled out on the mid-night of 30 June/1 July, 2017 during a special midnight session of the Parliament. The 101th Constitution Amendment Act received assent of the President of India on 8 September, 2016. The amendment introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. Thereafter CGST Act, UTGST Act and SGST Acts were enacted for GST. GST has simplified the multiplicity of taxes on goods and services. The laws, procedures and rates of taxes across the country are standardised. It has facilitated the freedom of movement of goods and services and created a common market in the country. It is aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets. It will also result into higher economic growth as GDP is expected to rise by about 2%. Compliance will also be easier as all tax payment related services like registration, returns, payments are available online through a common portal www.gst.gov.in. It has expanded the tax base, introduced higher transparency in the taxation system, reduced human interface between Taxpayer and Government and is furthering ease of doing business.

However, certain products have been kept out of the ambit of GST for the time being. Alcohol for human consumption continues to be taxed under the State Excise duty framework and is not covered by GST. Similarly, five petroleum products — namely crude oil, petrol, diesel, natural gas, and aviation turbine fuel (ATF) — have been temporarily kept outside the GST regime and continue to be subject to the existing central and state tax structures until the GST Council decides to bring them under GST. Tobacco and tobacco products, on the other hand, are covered under GST at the highest slab rate of 28%, along with an additional compensation cess levied on top of it.

Which of the following products have been kept out of the ambit of GST for the time being?

Alcohol and tobacco products.

Alcohol and petroleum products.

Petroleum products and tobacco products.

Alcohol, tobacco products and petroleum products.

Correct Answer

Option 2

Correct Answer

Explanation

Q49:

Macro

>

Government Budget

Medium

Comprehension:

GST: One Nation, One Tax, One Market

GST is the biggest tax reform in the country since independence and was rolled out on the mid-night of 30 June/1 July, 2017 during a special midnight session of the Parliament. The 101th Constitution Amendment Act received assent of the President of India on 8 September, 2016. The amendment introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. Thereafter CGST Act, UTGST Act and SGST Acts were enacted for GST. GST has simplified the multiplicity of taxes on goods and services. The laws, procedures and rates of taxes across the country are standardised. It has facilitated the freedom of movement of goods and services and created a common market in the country. It is aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets. It will also result into higher economic growth as GDP is expected to rise by about 2%. Compliance will also be easier as all tax payment related services like registration, returns, payments are available online through a common portal www.gst.gov.in. It has expanded the tax base, introduced higher transparency in the taxation system, reduced human interface between Taxpayer and Government and is furthering ease of doing business.

However, certain products have been kept out of the ambit of GST for the time being. Alcohol for human consumption continues to be taxed under the State Excise duty framework and is not covered by GST. Similarly, five petroleum products — namely crude oil, petrol, diesel, natural gas, and aviation turbine fuel (ATF) — have been temporarily kept outside the GST regime and continue to be subject to the existing central and state tax structures until the GST Council decides to bring them under GST. Tobacco and tobacco products, on the other hand, are covered under GST at the highest slab rate of 28%, along with an additional compensation cess levied on top of it.

Which of the following is not an advantage of GST?

It has facilitated the freedom of movement of goods and services and created a common market in the country.

It has increased the cost of business operations.

It has reduced the cascading effect of various taxes on consumers.

It has made Indian products more competitive in the domestic and international markets.

Correct Answer

Option 2

Correct Answer

Explanation

Q50:

Macro

>

Government Budget

Medium

Comprehension:

GST: One Nation, One Tax, One Market

GST is the biggest tax reform in the country since independence and was rolled out on the mid-night of 30 June/1 July, 2017 during a special midnight session of the Parliament. The 101th Constitution Amendment Act received assent of the President of India on 8 September, 2016. The amendment introduced Article 246A in the Constitution cross empowering Parliament and Legislatures of States to make laws with reference to Goods and Service Tax imposed by the Union and the States. Thereafter CGST Act, UTGST Act and SGST Acts were enacted for GST. GST has simplified the multiplicity of taxes on goods and services. The laws, procedures and rates of taxes across the country are standardised. It has facilitated the freedom of movement of goods and services and created a common market in the country. It is aimed at reducing the cost of business operations and cascading effect of various taxes on consumers. It has also reduced the overall cost of production, which will make Indian products/services more competitive in the domestic and international markets. It will also result into higher economic growth as GDP is expected to rise by about 2%. Compliance will also be easier as all tax payment related services like registration, returns, payments are available online through a common portal www.gst.gov.in. It has expanded the tax base, introduced higher transparency in the taxation system, reduced human interface between Taxpayer and Government and is furthering ease of doing business.

However, certain products have been kept out of the ambit of GST for the time being. Alcohol for human consumption continues to be taxed under the State Excise duty framework and is not covered by GST. Similarly, five petroleum products — namely crude oil, petrol, diesel, natural gas, and aviation turbine fuel (ATF) — have been temporarily kept outside the GST regime and continue to be subject to the existing central and state tax structures until the GST Council decides to bring them under GST. Tobacco and tobacco products, on the other hand, are covered under GST at the highest slab rate of 28%, along with an additional compensation cess levied on top of it.

Identify the incorrect feature in the context of GST.

Higher Transparency in tax regime.

It has contracted the tax base.

Ease of doing business.

It reduced human interference.

Correct Answer

Option 2

Correct Answer

Explanation

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