ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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provision of merit goods
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taxation on polluting business
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lowering interest rates
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progressive income tax
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Detailed explanation-1: -Answer and Explanation: The correct answer is b) Increasing the interest rate target.
Detailed explanation-2: -The correct answer is Interest Rate. Interest Rate does not form part of the fiscal policy of a country. Fiscal policy is the use of government revenue collection (mainly taxes but also non-tax revenues such as divestment, loans) and expenditure (spending) to influence the economy.
Detailed explanation-3: -Examples of expansionary fiscal policy measures include increased government spending on public works (e.g., building schools) and providing the residents of the economy with tax cuts to increase their purchasing power (in order to fix a decrease in the demand).
Detailed explanation-4: -Expansionary monetary policy is when a central bank uses its tools to stimulate the economy. That increases the money supply, lowers interest rates, and increases demand. It boosts economic growth.
Detailed explanation-5: -Answer and Explanation: The Answer is D. Private Investment. Private Investment is not a fiscal policy tool.