Question

Fiscal policy is connected with which of the following?

• A. Exports and imports
• B. Public revenue and expenditure
• C. Issue of currency
• D. None of them

Answer 1

Answer: (B)

Public revenue and expenditure

Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's money supply. Public revenue collected from various sources is allocated for different purposes. Generally, it is classified into development expenditure and administrative expenditure. The central government with the help of fiscal policies allocates resources through its ministries, departments and local authorities.