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    Question

    A decrease in the tax to GDP ratio 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 1 only Correct Answer Incorrect Answer
    B 2 only Correct Answer Incorrect Answer
    C Both 1 and 2 Correct Answer Incorrect Answer
    D Neither 1 nor 2 Correct Answer Incorrect Answer
    E Insufficient information Correct Answer Incorrect Answer

    Solution

    Tax to GDP ratio shows growth in the economy not the distribution of income. hence, statement 2 is incorrect.

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