SSC CPO 2025 PYQ — Question 91

Correct Answer – Government Spending.

Explanation:

• Index of Economic Freedom: This index is published annually by 'The Heritage Foundation' and 'The Wall Street Journal'. It measures the extent to which a country's policies and institutions foster economic freedom.
• Key Pillars: Economic freedom is primarily categorized into 4 pillars and 12 components. 'Government Spending' is one of these key components, falling under the pillar titled 'Government Size.'
• Assessment: If a country's government spending is excessively high, it often receives lower scores for economic freedom, as this may imply a heavier tax burden on the private sector or increased public debt.

The 4 Main Pillars of Economic Freedom:

• Rule of Law: Property rights, judicial effectiveness, and government integrity.
• Government Size: Tax burden, government spending, and fiscal health.
• Regulatory Efficiency: Business freedom, labor freedom, and monetary freedom.
• Open Markets: Trade freedom, investment freedom, and financial freedom.

Important Questions for Upcoming Examinations:

• Question: Which organization publishes the Index of Economic Freedom?
• Answer: The Heritage Foundation.
• Question: Which country typically ranks at the top in terms of economic freedom?
• Answer: Singapore.
• Question: Under which pillar does 'Tax Burden' fall?
• Answer: Government Size.