ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The objective of fiscal policy is to maintain the condition of full employment, economic stability and to stabilize the rate of growth. For an under-developed economy, the main purpose of fiscal policy is to accelerate the rate of capital formation and investment.

Detailed explanation-2: -The primary objective of the fiscal policy is to regulate the case of economic stability, full employment and stabilize the growth rate. It is often optimized with monetary policy, including the banking system, the supply of money in circulation and the management of interest rates.

Detailed explanation-3: -Price Stability and Control of Inflation: One of the main objectives of fiscal policy is to control inflation and stabilize price. Therefore, the government always aims to control the inflation by reducing fiscal deficits, introducing tax savings schemes, productive use of financial resources, etc.

Detailed explanation-4: -Economic growth: Fiscal policy helps maintain the economy’s growth rate so that certain economic goals can be achieved. Price stability: It controls the price level of the country so that when the inflation is too high, prices can be regulated.

Detailed explanation-5: -What Is Full Employment? Full employment is an economic situation in which all available labor resources are being used in the most efficient way possible. Full employment embodies the highest amount of skilled and unskilled labor that can be employed within an economy at any given time.