The Tobin Tax proposed by James Tobin is a tax on 1 Foreign Direct Investment 2 Foreign Portfolio In...........

Economic Affairs Tax System

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The Tobin Tax proposed by James Tobin is a tax on

1. Foreign Direct Investment

2. Foreign Portfolio Investment

3. NRI Deposits

Select the correct answer from the codes given below:

1 and 3

2 only

1, 2 and 3

2 and 3

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Explanation:

DEFINITION of 'Tobin Tax '
A means of taxing spot currency conversions that was originally suggested by American economist James Tobin (1918-2002). The Tobin tax was developed with the intention of penalizing short-term currency speculation, and to place a tax on all spot conversions of currency. Rather than a consumption tax paid by consumers, the Tobin tax was meant to apply to financial sector participants as a means of controlling the stability of a given country's currency.