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प्रश्न
Distinguish between fiscal policy and monetary policy.
State one important difference between fiscal and monetary policy.
Distinguish between monetary and fiscal policy (one point).
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उत्तर
| Sr. No. | Fiscal Policy | Monetary Policy |
| 1. | Fiscal policy is the policy of taxation and government expenditure. | Monetary policy is the policy of central bank to control the supply of money and credit in the economy. |
| 2. | Fiscal policy affects the overall expenditure in the economy. | Changes in money supply and credit lead to change in interest rates. |
| 3. | Its instruments are: taxes, public debt, deficit financing and govt. expenditure. | Its instruments are: Bank rate, open market operations, CRR, SLR, margin requirement etc. |
Notes
Students should refer to the answer according to their questions.
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संबंधित प्रश्न
The essential feature of a tax.
______ are those taxes which are paid by the same person on whom they have been imposed.
Match the following:
| Column I | Column II | ||
| A. | Direct tax | (i) | Tax rate increases with tax base |
| B. | Indirect tax | (ii) | Tax rate remains constant |
| C. | Proportional tax | (iii) | Imposed on goods and services |
| D. | Progressive tax | (iv) | Impact and incidence lie on the same person |
Match the following:
| Column I | Column II | ||
| A. | Impact of tax | (i) | Price stability |
| B. | Incidence of tax | (ii) | Simple to calculate |
| C. | Objective of Monetary Policy | (iii) | Ultimate burden of tax |
| D. | Proportional tax | (iv) | Original imposition of tax |
Citing reason state the advantage of a direct tax over an indirect tax.
Classify the following type of tax into direct and indirect taxes:
House tax
Give two reasons why the government imposes tax?
An indirect tax can be made progressive by imposing higher tax rates on luxuries. Justify the above statement.
Explain how tax can be used as an instrument to regulate consumption and production in an economy.
State three demerits of an Indirect tax.
