Question

A policy under which the government uses its expenditure and revenue to produce desirable effect and avoid undesirable effects on the national income, production and employment. This defines ______.

Options

• Monetary Policy

• Wage Policy

• Price Policy

• Fiscal Policy

Answer 1

A policy under which the government uses its expenditure and revenue to produce desirable effect and avoid undesirable effects on the national income, production and employment. This defines Fiscal Policy.

Explanation:

1. Fiscal Policy is the policy under which the government uses its expenditure (spending) and revenue (taxation) to influence the economy.
2. The aim is to produce desirable effects, such as increasing national income, boosting production, and promoting employment, while avoiding undesirable effects like inflation or excessive deficits.