Question

______ deal(s) with the taxation and expenditure decisions of the Government.
1. Monetary Policy
2. Labour Market Policies
3. Trade Policy
4. Fiscal Policy

Answer 1

Correct Answer - Option 4 : Fiscal Policy

The correct answer is Fiscal Policy.

• Fiscal Policy deals with the taxation and expenditure decisions of the Government.

 

• Monetary policy & Fiscal Policy
  • Monetary policy and fiscal policy are two different tools that have an impact on the economic activity of a country.
  • Monetary policies are formed and managed by the central banks of a country and such a policy is concerned with the management of money supply and interest rates in an economy.
  • Fiscal policy is related to the way a government is managing the aspects of spending and taxation.
  • It is the government’s way of stabilising the economy and helping in the growth of the economy.
  • Governments can modify the fiscal policy by bringing in measures and changes in tax rates to control the fiscal deficit of the economy.