Question : The government's fiscal policy is aimed at ____________.
Option 1: Controlling inflation
Option 2: Reducing income inequality
Option 3: Promoting exports
Option 4: Stabilizing exchange rates
Correct Answer: Controlling inflation
Solution : The correct answer is (A) Controlling inflation.
Fiscal policy is often used by governments to manage and stabilize the economy. One of the primary objectives of fiscal policy is to control inflation, which refers to the sustained increase in the general price level of goods and services over time. By adjusting taxation and government spending, the government can influence aggregate demand and curb inflationary pressures in the economy.
Reducing income inequality and promoting exports are also goals that governments may pursue, but they are not the primary objectives of fiscal policy. Stabilizing exchange rates is primarily the responsibility of monetary policy conducted by the central bank.
Question : Fiscal policy refers to:
Option 1: Government policies that affect the overall level of economic activity
Option 2: Monetary policies implemented by the central bank
Option 3: Policies aimed at reducing inflation
Option 4: Policies aimed at reducing unemployment
Question : Which policy aimed at reducing India's dependence on imports and promoting self-reliance?
Option 1: Import Substitution Policy
Option 2: Export Promotion Policy
Option 3: Liberalization Policy
Option 4: Privatization Policy
Question : The government's policy of reducing taxes to stimulate economic growth is known as ____________.
Option 1: Austerity measures
Option 2: Expansionary fiscal policy
Option 3: Contractionary fiscal policy
Option 4: Supply-side economics
Question : Which policy aimed to reduce the fiscal deficit and promote fiscal discipline in the 1991 economic policy?
Option 1: Monetary policy
Option 2: Fiscal policy
Option 3: Public debt policy
Option 4: External debt policy
Question : The 'License-Permit-Quota' system in India was aimed at:
Option 1: Promoting ease of doing business
Option 2: Regulating foreign investment
Option 3: Controlling inflation
Option 4: Managing industrial growth
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