ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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use of taxing and interest rates to influence the economy
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use of money supply and interest rates to influence the economy
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use of taxing and govt. spending to influence the economy
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use of govt. spending and money supply to influence the economy
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Detailed explanation-1: -Fiscal policy is defined as the policy under which the government uses the instrument of taxation, public spending and public borrowing to achieve various objectives of economic policy. Simply put, it is the policy of government spending and taxation to achieve sustainable growth.
Detailed explanation-2: -Fiscal policy refers to the use of government spending and tax policies to influence economic conditions.
Detailed explanation-3: -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-4: -There are three types of fiscal policy. They are neutral policy, expansionary policy, and contractionary policy.
Detailed explanation-5: -Fiscal policy in India aims to raise a considerable quantity of money to fund the government’s various programmes through taxes. It aims to eliminate inequality in income and wealth distribution by giving sufficient incentives to the private sector.