What is/are the objective(s) of Fiscal Policy?
1) Boost growth
2) Control inflation
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Both 1 and 2.
- The objectives of Fiscal Policy include both boosting growth and controlling inflation, among others. Fiscal policy involves government spending, taxation, and borrowing to stimulate economic growth, particularly through infrastructure development, employment generation, and industrial support.
- By adjusting tax rates and government expenditure, fiscal policy can help reduce excess demand and control inflation. Reducing government spending or increasing taxes can help curb inflationary pressures.