Economics • Indian EconomyEasy
Which of the following measures is generally considered 'Expansionary Fiscal Policy'?
A. Increasing tax rates and reducing public expenditure on infrastructure
B. Reducing tax rates and increasing government spending to boost aggregate demand✓ Correct Answer
C. Raising the repo rate and cash reserve ratio simultaneously
D. Selling government securities in open market operations to absorb liquidity
💡 Solution & Explanation
Expansionary fiscal policy involves lowering tax burdens and expanding government expenditure to inject purchasing power and stimulate aggregate demand during economic slowdowns. Raising interest rates or selling government bonds represents contractionary monetary policy aimed at curbing inflation.
More Economics Indian Economy questions
- Which of the following indices is compiled and released by the Ministry of Commerce and Industry to track…
- What is the core mandate of the 'National Bank for Agriculture and Rural Development (NABARD)' regarding…
- What is the primary mandate of the 'Securities and Exchange Board of India' (SEBI)?
- Evaluate the implementation of the 'Fiscal Responsibility and Budget Management Act, 2003' in India. What was…
- What is the primary objective of the 'Production Linked Incentive' scheme introduced across key manufacturing…