[Mission 2022] QUIZ – 2022: INSIGHTS STATIC QUIZ, 9 June 2022 – Economy

Solution: d)

• e.f., Assessment Year 2021-22, the domestic company isn’t required to pay dividend distribution tax on any amount declared, distributed or paid by such company by way of dividend.
• Dividend received from domestic company is taxable in hands of shareholders.
• Now mutual fund dividends have been made taxable in the hands of investors. Now dividend income will be considered as income from other sources and investors will have to pay tax on it as per their individual tax slabs. Hence the benefit or loss owing to mutual fund dividend tax as compared to the previous regime of DDT tax will depend on the investor’s tax slab.

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Solution: c)

The major developments relating to India’s external debt as at end-June 2021.

• The external debt to GDP ratio declined to 2 per cent at end-June 2021 from 21.1 per cent at end-March 2021.
• Long-term borrowings (more than a year to maturity) dominateIndia’s external debt.
• Commercial borrowings remained the largest component of external debt, with a share of 37.4 per cent, followed by non-resident deposits (24.8 per cent) and short-term trade credit (17.4 per cent).
• US dollar denominated debt remained the largest component of India’s external debt, with a share of 52.4 per cent at end-June 2021, followed by debt denominated in the Indian rupee (33.2 per cent), yen (5.8 per cent), SDR (4.4 per cent) and the euro (3.4 per cent).

Solution: b)

Aggregate demand is the total demand for final goods and services in an economy at a given time.

Increasing the investments and lowering interest rate on consumer loans increases the disposable income and thus creates demand. However, increasing the tax rate on personal income leads to decrease in disposable income. Thus, reduces the aggregate demand.

Solution: c)

In economics, the GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year.

Like the consumer price index (CPI), the GDP deflator is a measure of price inflation/deflation with respect to a specific base year.

The GDP deflator is a more comprehensive inflation measure than the CPI index because it isn’t based on a fixed basket of goods.

When GDP deflator is negative, nominal GDP is less than real DP. It means that there is deflation in the economy.

Solution: a)

In macroeconomics and finance, a transfer payment is a redistribution of income and wealth by means of the government making a payment, without goods or services being received in return. These payments are considered to be non-exhaustive because they do not directly absorb resources or create output. Examples of transfer payments include welfare, financial aid, social security, and government subsidies for certain businesses.