Assertion (A): Lower income tax rates were expected to raise tax revenue.
Reason (R): Moderate rates encourage people to declare their income honestly.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

If more income is declared, a lower rate on a larger base can still bring in more revenue.
R explains A.

Concept: Tax reforms
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsLiberalisation

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Ten questions from Economic Reforms since 1991 (LPG), at your own pace.

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Ten questions from Economic Reforms since 1991 (LPG), at your own pace.

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Assertion (A): Lower income tax rates were expected to raise tax revenue.Reason (R): Moderate rates encourage people to declare their income honestly.

Explanation

Assertion (A): Lower income tax rates were expected to raise tax revenue.
Reason (R): Moderate rates encourage people to declare their income honestly.