ECONOMICS (CBSE/UGC NET)

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ECONOMICS

MONETARY POLICY

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
“The 2013 budget ____ included job-creation initiatives for infrastructure, job-training and innovation”. To offset the cost, it “called for raising $1.5 trillion over 10 years from the wealthiest taxpayers and from closing some corporate tax breaks, chiefly for oil and gas companies.” 6
A
Fiscal Policy
B
Monetary Policy
C
Either A or B
D
None of the above
Explanation: 

Detailed explanation-1: -Expansionary fiscal policy is intended to boost growth to a healthy economic level, which is required during the business cycle’s contractionary period. The government seeks to reduce unemployment, raise consumer demand, and stop the recession.

Detailed explanation-2: -The two major examples of expansionary fiscal policy are tax cuts and increased government spending.

Detailed explanation-3: -Answer and Explanation: The correct option is d. It will increase budget deficits and the national debt. An expansionary fiscal policy is implemented using a deficit budget.

Detailed explanation-4: -Fiscal policy that increases aggregate demand directly through an increase in government spending is typically called expansionary or “loose.” By contrast, fiscal policy is often considered contractionary or “tight” if it reduces demand via lower spending.

There is 1 question to complete.
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