ECONOMICS (CBSE/UGC NET)

ECONOMICS

FISCAL POLICY

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The federal budget is the instrument by which the government implements
A
central planning of the economy.
B
fiscal policy.
C
monetary policy.
D
free market ideals.
Explanation: 

Detailed explanation-1: -Fiscal policy refers to the budgetary policy of the government, which involves the government controlling its level of spending and tax rates within the economy. The government uses these two tools to influence the economy. It is the sister strategy to monetary policy.

Detailed explanation-2: -The correct answer is fiscal policy of the government. The budget is an instrument of fiscal policy of the government. The purpose of a budget is to plan, organize, track, and improve your financial situation.

Detailed explanation-3: -The main instruments of fiscal policy are public revenue, public expenditure and public debt.

Detailed explanation-4: -governments. To provide the basis for this assignment and give medium term guidance on fiscal matters, the Constitution provides for the formation of a Finance Commission (FC) every five years. Based on the report of the FC the central taxes are devolved to the state governments.

Detailed explanation-5: -The two main instruments of fiscal policy are government expenditures and taxes. The government collects taxes in order to finance expenditures on a number of public goods and services-for example, highways and national defense. Budget deficits and surpluses.

There is 1 question to complete.