Question

What is likely impact of recently introduced ""Goods and Service Tax – a single tax on goods and services"" on the economy’s PPC?

Answer 1

Answer:

In GST this cascading effect is removed as the Input Tax Credit (“ITC”) is available for all goods and services at each and every stage of the supply chain. So, now the final price of goods and services was lowered due to the seamless flow of ITC between the manufacturer, retailer and service provider

Explanation:

Answer 2

Answer:

The production possibility curve will shift to the right, this is because GDP will lead to increase in production which will inturn lead to increase in the resource base of the country, which will lead to higher investments on goods(I = ∆k) , higher the investment higher the GDP.