ECONOMICS (CBSE/UGC NET)

ECONOMICS

FISCAL POLICY

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

Cutting or decreasing which of the following would be an example of expansionary fiscal policy?

A	income taxes
B	government spending
C	production of consumer goods
D	workers’ wages

Explanation:

Detailed explanation-1: -The two significant examples include increased government spending as well as tax cuts. These policies seek to raise aggregate demand while leading to deficits or drawing the decline of budget surpluses.

Detailed explanation-2: -The two major examples of expansionary fiscal policy are tax cuts and increased government spending. Both of these policies are intended to increase aggregate demand while contributing to deficits or drawing down budget surpluses.

Detailed explanation-3: -Answer and Explanation: Expansionary fiscal policy is: c. Both an increase in government spending and a decrease in taxes.

Detailed explanation-4: -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.

There is 1 question to complete.