ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -There are three components of the Fiscal Policy of India: Government Receipts. Government Expenditure. Public Debt.

Detailed explanation-2: -A contractionary policy is a tool used to reduce government spending or the rate of monetary expansion by a central bank to combat rising inflation. The main contractionary policies employed by the United States include raising interest rates, increasing bank reserve requirements, and selling government securities.

Detailed explanation-3: -An expansionary monetary policy would help boost aggregate demand and this would help reduce unemployment. The correct answer is B as this would be introduced as an attempt to reduce unemployment.

Detailed explanation-4: -the government’s fiscal policy options for ending severe demand-pull inflation include: reducing government spending, increasing taxes, or both. A political business cycle is the concept that: politicians are more interested in reelection than in stabilizing the economy.