BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Which one of the following is not an objective of fiscal policy?

A	Economic growth
B	Economic stability
C	Maximization of employment level
D	None of these

Explanation:

Detailed explanation-1: -To increase liquidity in economy is not the main objective of Fiscal Policy in India.

Detailed explanation-2: -Objectives of Fiscal Policy The following are the objectives of the Fiscal Policy: Higher Economic Growth. Price Stability. Reduction in Inequality.

Detailed explanation-3: -The correct answer is Interest Rate. Interest Rate does not form part of the fiscal policy of a country. Fiscal policy is the use of government revenue collection (mainly taxes but also non-tax revenues such as divestment, loans) and expenditure (spending) to influence the economy.

Detailed explanation-4: -Fiscal policy is a means to use government spending and taxation to influence the economic situation. It is different from the monetary policy that is under the control of the central bank in that country. Together these two policies can help a country to achieve its economic goals.

There is 1 question to complete.