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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
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Solution
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:
- Fiscal Policy is the policy under which the government uses its expenditure (spending) and revenue (taxation) to influence the economy.
- 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.
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RELATED QUESTIONS
Instruments of fiscal policy is:
Match the following and select the correct option:
| Column A | Column B | ||
| (i) | Taxes imposed on income and wealth | A. | Regressive |
| (ii) | Taxes imposed on goods and services | B. | Progressive |
| (iii) | A tax system where the rate of tax decreases with increase income | C. | Direct taxes |
| (iv) | A tax system where the rate of tax increases as income increase | D. | Indirect taxes |
Observe the relationship of the first pair of words and complete the second pair:
Tax paid by person on whose it is imposed : Direct tax.
A tax is paid by some person and the final burden is born by some other person : ______.
The state can promote economic development by ______.
Identify the tax which is most likely to faster civic conciousness.
Which of the statement is true for income tax?
Define Indirect tax
'The role of the State is important in developing the economic infrastructure of a developing economy'. Give two reasons to support your answer.
An indirect tax is not always equitable. Give two reasons to support your answer.
Define a tax.
