If the revenue from income-tax increases from ₹ 100 crore to ₹ 109 crore and nominal GDP increases from…
Tax buoyancy is percentage tax-revenue growth divided by percentage nominal-GDP growth: [(109−100)/100]/[(112−100)/100]=9%/12%=0.75. The 1.33 choice reverses the ratio; 3…
Choose your answer
If the revenue from income-tax increases from ₹ 100 crore to ₹ 109 crore and nominal GDP increases from ₹ 100 crore to ₹ 112 crore, the tax buoyancy of income tax is given by which of the following ?
Answer and explanation
Correct answer B
Tax buoyancy is percentage tax-revenue growth divided by percentage nominal-GDP growth: [(109−100)/100]/[(112−100)/100]=9%/12%=0.75. The 1.33 choice reverses the ratio; 3 does not follow from proportional changes; the expanded none choice is false.
Practice for these exams
-
UGC NET Economics