Question

Fiscal Policy relates to:

• A. Public Expenditure
• B. Public Revenue
• C. Public Debt
• D. All of the above

Answer 1

The correct option is D All of the above

The tools of fiscal policy are taxes, expenditure, public debt and a nation's budget. They consist of changes in government revenues or rates of the tax structure so as to encourage or restrict private expenditures on consumption and investment. The objective of fiscal policy is to maintain the condition of full employment, economic stability and to stabilize the rate of growth. For an under-developed economy, the main purpose of fiscal policy is to accelerate the rate of capital formation and investment.