Advertisements
Advertisements
Questions
Distinguish between fiscal policy and monetary policy.
State one important difference between fiscal and monetary policy.
Distinguish between monetary and fiscal policy (one point).
Advertisements
Solution
| 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.
APPEARS IN
RELATED QUESTIONS
______ are those taxes which are paid by the same person on whom they have been imposed.
The government imposes tax ______.
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 |
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 ______.
Define Indirect tax
Classify the following type of tax into direct and indirect taxes:
Sales tax
What is meant by regressive taxation?
Explain the following with examples:
Progressive tax
With reference to the taxation policy.
Differentiate between progressive and regressive taxes giving an example for each.
Citing reasons state the superiority of Progressive tax over regressive tax.
