Question

Fiscal policy means:

• A. Policy related to money matter
• B. Policy related to income and expenditure of the government
• C. Policy related to disbursement for funds to state government
• D. Policy related to foreign trade matter

Answer 1

Answer: (B)

Policy related to income and expenditure of the government

Fiscal Policy is concerned with public revenue and public expenditure and debt. Fiscal policy helps to ensure economic stability and economic growth. During inflation, revenue is decreased. Whereas, during deflation, revenue is increased. How much money should the government collect in taxes, and how should the government spend the money that it raises or borrows, as the case may be? These are the central questions of fiscal policy