Indian Economy Chapter 20 Mock Test – Fiscal Policy (30 MCQs)
KYASC INSTITUTE
Indian Economy Chapter 20 Mock Test
Fiscal Policy
Fiscal policy refers to the government policy that deals with taxation, public expenditure and government borrowing in order to influence the economic conditions of a country. It is one of the most important tools used by the government to control inflation, promote economic growth and stabilize the economy during periods of recession or economic slowdown.
In India, fiscal policy is designed and implemented by the government through the Union Budget which is presented every year by the Finance Minister in the Parliament. Through fiscal policy, the government decides how much money should be collected through taxes and how that money should be spent on various sectors such as infrastructure, education, healthcare, agriculture and defense.
Fiscal policy plays an important role in reducing poverty, promoting employment and ensuring balanced regional development. Government expenditure on welfare programs, subsidies, development projects and public services helps in improving the standard of living of people and stimulating economic activity in the country.
Fiscal policy also helps in maintaining economic stability by controlling budget deficits and public debt. During economic recession, the government may increase spending and reduce taxes to stimulate demand, while during inflation the government may reduce expenditure or increase taxes to control excessive demand in the economy.
Understanding fiscal policy is extremely important for competitive exams such as UPSC, SSC, CDS, Banking and State PSC exams because many questions are frequently asked from topics such as fiscal deficit, government expenditure, taxation policy and budget management.
Instructions
- Total Questions: 30
- No Negative Marking
- Select the correct answer
- Click Finish Test to generate certificate