Which of the following statements is/are correct?

  1. A low debt -GDP ratio denotes higher capacity to meet debt obligations
  2. A low tax-GDP ratio denotes higher equitable distribution of national income

Which of the above is / are correct statements?

Answer: [A] Only 1

The second statement is written reverse. A higher tax-GDP ratio means more taxes are part of GDP and shows more equal distribution of national income. 

This question is a part of GKToday's Integrated IAS General Studies Module