ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Increasing government spending and increasing tax
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Increasing government spending and decreasing tax
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Decreasing government spending and increasing tax
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Decreasing government spending and decreasing tax
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Detailed explanation-1: -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.
Detailed explanation-2: -Fiscal policy is the expenditure and revenue (tax) policy of the government to accomplish the desired objectives. In case of excess demand (i.e., when current demand is more than AS at full employment), objective of fiscal policy is to reduce aggregate demand.
Detailed explanation-3: -fiscal policy, measures employed by governments to stabilize the economy, specifically by manipulating the levels and allocations of taxes and government expenditures. Fiscal measures are frequently used in tandem with monetary policy to achieve certain goals.
Detailed explanation-4: -Some of the most common benefits of fiscal policy are: The fiscal policy can reduce the level of unemployment in the economy by using expansionary fiscal policies. It involves increasing government spending and real income through reduced taxes.