ECONOMICS
FEDERAL RESERVE
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Through changing the discount rate
|
|
|
Through taxing and spending
|
|
|
By raising or lowering interest rates
|
|
|
By printing more money
|
Detailed explanation-1: -The tools of fiscal policy also aim to stabilise the economy during various inflationary pressures. In the short term, the governments may focus on macroeconomic stabilisation by cutting taxes and increasing spending to boost a weak economy or increase taxes and reduce spending during inflation.
Detailed explanation-2: -Fiscal policy is a government’s decisions regarding spending and taxing. If a government wants to stimulate growth in the economy, it will increase spending for goods and services. This will increase demand for goods and services. Since demand goes up, production must go up.
Detailed explanation-3: -There are three components of the Fiscal Policy of India: Government Receipts. Government Expenditure. Public Debt.
Detailed explanation-4: -Some of the key objectives of fiscal policy are economic stability, price stability, full employment, optimum allocation of resources, accelerating the rate of economic development, encouraging investment, and capital formation and growth.
Detailed explanation-5: -Contractionary fiscal policy, on the other hand, is a measure to increase tax rates and decrease government spending. It occurs when government deficit spending is lower than usual.