Question

Expenditure reducing policies consist of _________ .
A) tight monetary policy
B) contractionary fiscal policy
C) expansionary monetary& fiscal policies
D) contractionary monetary andfiscal
policies​

Answer 1

Answer:

answer is fiscal or monetary policy is correct answer I think you got your answer ok

Answer 2

Option D is the correct answer.

Expenditure reducing policies consist of contractionary monetary and fiscal policy.

In contractionary fiscal policy government aims to reduce expenditure by

• raising taxes
• reducing government expenditure
• It is done to slow down an economy

In contractionary monetary policy central bank (RBI) controls the monetary instruments such as CRR, SLR, open market securities etc. to

• decrease money supply- it leads to rise in interest rates- this leads to decline in investment expenditure and aggregate demand