public finance fiscal & monetary policy section 3 MCQ Questions & Answers Detailed Explanation

Answer: (b)

Under Article 280 of the Constitution, the President appoints a Finance Commission every five years

Answer: (c)

Answer: (c)

The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual’s ability to pay. The idea of the ability to pay principle considers whether or not it is fair to tax someone higher just because that person has the ability and resources to pay.

If it is decided that they should be required to pay more, the question of how much more arises.

These questions can be analyzed through horizontal and vertical equity which are subsets of the ability-to-pay principle. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes.

Vertical equity is the idea that people who have a higher ability to pay more than those who have a lower ability to pay, as long as the increase in tax level is considered to be reasonable.

Answer: (b)

Answer: (a)

The voluntary retirement scheme (VRS) is the most humane technique to provide an overall reduction in the existing strength of the employees. It is a technique used by companies for trimming the workforce employed in the industrial unit.

It is also known as the ‘Golden Handshake’ as it is the golden route to retrenchment.

Answer: (c)

Sales tax come under exclusive jurisdiction of state government and custom duties comes under Central govt jurisdiction.