ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Expansionary fiscal policy tools include increasing government spending, decreasing taxes, or increasing government transfers.

Detailed explanation-2: -Increasing spending and cutting taxes to produce budget deficits means that the government is putting more money into the economy than it is taking out. Expansionary fiscal policy includes tax cuts, transfer payments, rebates and increased government spending on projects such as infrastructure improvements.

Detailed explanation-3: -There are three components of the Fiscal Policy of India: Government Receipts. Government Expenditure. Public Debt.

Detailed explanation-4: -Expansionary fiscal policy is said to be in action when the government increases the spending and lowers tax rates for boosting economic growth. This increases consumption as there is a rise in purchasing power.