ECONOMICS
INFLATION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -The tools of fiscal policy also aim to stabilise the economy during various inflationary pressures. In the short term, the governments may focus on macroeconomic stabilisation by cutting taxes and increasing spending to boost a weak economy or increase taxes and reduce spending during inflation.
Detailed explanation-2: -Which of the following statements is true regarding expansionary fiscal policy? It leads to an increase in the supply of bonds by the Treasury.
Detailed explanation-3: -There are three components of the Fiscal Policy of India: Government Receipts. Government Expenditure. Public Debt.
Detailed explanation-4: -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.