Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

In one of the budget, the Finance Minister proposed to raise the excise duty on "Alcohol". What was the objective of the government behind this move?

Options:

Generation of revenue

Achieving welfare

Increasing the tax base of government

Both 1 and 2

Correct Answer:

Both 1 and 2

Explanation:

The policy objectives adopted by the government is not just to earn revenue but also to achieve social welfare. The imposition of tax will raise the prices and would discourage the end consumer to purchase that commodity. Also, the increased revenue can be spend on education, welfare programs, health etc.