Question
Which of the following statements are true regarding "fiscal stimulus":
Select the correct answer using the code given below:
- It is a strategy to boost the sluggish economy
- RBI pumps money into the economy
- Government reduces subsidies
- Public spending increases
Select the correct answer using the code given below:
Answer: Option D
Answer: (d)
A ‘stimulus’ is an attempt by policymakers to kickstart a sluggish economy through a package of measures.
In the case of fiscal stimulus, the Government increases its spending and or slashes tax rates to put more money in the hands of consumers.
A monetary stimulus will see the central bank expanding money supply or reducing the cost of money (interest rates), to spur consumer spending.
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Answer: (d)
A ‘stimulus’ is an attempt by policymakers to kickstart a sluggish economy through a package of measures.
In the case of fiscal stimulus, the Government increases its spending and or slashes tax rates to put more money in the hands of consumers.
A monetary stimulus will see the central bank expanding money supply or reducing the cost of money (interest rates), to spur consumer spending.
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