Advertisements
Advertisements
प्रश्न
Answer the following question.
In the given figure, what does the gap 'KT' represent? State any two fiscal measures to correct the situation.
Advertisements
उत्तर
The gap 'KT' represents the inflationary gap. This is the situation of excess demand.
Fiscal policy refers to the policy that is undertaken by the government to influence the economy through the process of its expenditure and taxation.
The fiscal measures to correct the excess demand are given as follows:
- Government Expenditure: The Government of a country incurs various types of expenditure to enhance the welfare of the people and also to facilitate economic growth and development.
In case of excess demand, the government cuts down its expenditures in the form of disinvestment. This lowers the level of economic activity, which in turn, reduces the level of employment, thereby reducing the income level. This subsequently reduces the aggregate demand, thus, the situation of excess demand gets corrected. - Public Borrowings: Through the measure of public borrowings, the government affects the liquidity (cash balances) held by the public. It is because of the excess liquidity, the people demand more and vice-versa. Therefore, the government affects the liquidity balances with the help of public borrowings.
In the case of excess demand, the government raises public borrowings, which reduces the liquidity balances with the public. A reduction in the liquidity lowers the purchasing power of the people, which in turn, lowers the aggregate demand.
संबंधित प्रश्न
Fiscal deficit equals :
(a) Interest payments
(b) Borrowings
(c) Interest payments less borrowing
(d) Borrowing less interest payments
Distinguish between revenue deficit and fiscal deficit.
‘The fiscal deficit gives the borrowing requirement of the government’. Elucidate.
Consider an economy described by the following functions:- C = 20 + 0.80Y, I = 30, G = 50, TR = 100, calculate the effect on output of a 10 per cent increase in transfers, and a 10 per cent increase in lump-sum taxes. Compare the effects of the two.
Does public debt impose a burden? Explain.
What do you understand by G.S.T?
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
Which of the following is the formula for revenue deficit?
| S. No. | Content | Rs (in crores) |
| 1. | Revenue Expenditure | 100 |
| 2. | Capital Receipts | 40 |
| 3. | Net Borrowings | 38 |
| 4. | Net Interest Payments | 27 |
| 5. | Tax Revenue | 50 |
| 6. | Non-tax Revenue | 15 |
Which of the following is MOST LIKELY to be the main contributor to the fiscal deficit in this case?
When the revenue receipts are less than the revenue expenditures in a government budget, this shortfall is termed as
What is relation between government deficit and government debt?
How do we get the primary deficit from the fiscal deficit?
If India exports goods worth ₹20 crores and imports goods worth ₹30 crores, it will have a ______
Identify the correctly matched pair of the items in Column A to those in Column B:
| Column A | Column B | ||
| 1 | Fiscal Deficit | (a) | Other than interest payments |
| 2 | Primary Deficit | (b) | Borrowings less interest payments |
| 3 | Revenue Deficit | (c) | Borrowings |
| 4 | Tax Deficit | (d) | Borrowings in government budget |
Identify which of the following statements is true.
The shape of average revenue curve in monopoly is ______
Compare the trends depicted in the figures given below:
| Figure 1: Trends in Fiscal deficit and Primary deficit |
Figure 2: Fiscal deficit as a percent of Budget estimate |
 |
 |
How good is the system of G.S.T as compared to the old tax system?
