Question

Interest equalization tax is a tax imposed on:

A earnings on investment income at home to make it less attractive

B earnings on investment income abroad to make it more attractive

C earnings on investment income abroad to make it less attractive

D earnings on investment at home and abroad

Which of the following was a feature of the British plan led by Keynes to reform the international monetary system of 1944?

A fixed exchange rates with no room for any devaluation

B fixed exchange rates with each members right to devalue by 10%

C creation of "Stabilization Fund"

D interest charge on countries that accumulate international reserves

Answer 1

Ans 1: Interest equalization tax is a tax imposed on: C earnings on investment income abroad to make it less attractive

The motive was to reduce BOP deficit. By imposing tax on foreign investment, the government want investors to invest more in domestically and less in foreign countries.

Ans 2: Which of the following was a feature of the British plan led by Keynes to reform the international monetary system of 1944?

B fixed exchange rates with each members right to devalue by 10%.