GK
INDIAN ECONOMY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Expansionary fiscal policy
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Contractionary fiscal policy
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Expansionary monetary policy
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Contractionary monetary policy
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Detailed explanation-1: -Expansionary fiscal policy increases the level of aggregate demand, either through increases in government spending or through reductions in taxes. Expansionary fiscal policy is most appropriate when an economy is in recession and producing below its potential GDP.
Detailed explanation-2: -An expansionary fiscal policy involves increasing spending or cutting taxes to prevent or end a recession or depression. A contractionary fiscal policy involves cutting spending or raising taxes to slow down unsustainable economic growth.
Detailed explanation-3: -increasing consumption by raising disposable income through cuts in personal income taxes or payroll taxes; increasing investments by raising after-tax profits through cuts in business taxes; and. More items