Question

59. Which one of the following activity is part of the fiscal stimulus?
1. Lowering interest rates.
2. Increasing government spending
3.Quantitative easing.
4. Buy back policy of corporate firms
Correct answer code is:

• A. Only 1, 2 and 3
• B. Only 2, 3 and 4
• C. Only 1, 2 and 4
• D. Only 1, 3 and 4

Answer 1

The correct option is A Only 1, 2 and 3

Economic stimulus consists of attempts by governments or government agencies to financially stimulate an economy. An economic stimulus is the use of monetary or fiscal policy changes to kick start growth during a recession. Governments can accomplish this by using tactics such as lowering interest rates, increasing government spending and quantitative easing, to name a few. Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply