Question

Which of the following alternatives is not a part of fiscal policy? a) subsidy under the public distribution system, b) control of population, c) impoaction of taxation d) issue of bonds by government

Answer 1

Fiscal policy is the sister strategy to support the economy, this policy is executed by government unlike monetary policy which is run by central bank of the country. Fiscal policy is based on three components,

- Govt. spending

- Taxation

- Transfer amount.

In given options, control of population is not part of the fiscal policy. Giving subsidy or issuing bonds are part of govt. spending.  

Answer 2

The control of the Population is not part of the Fiscal policy.

Option: (b)

Explanation:

• The fiscal policy is used for curbing the economy. The government can make use of the fiscal policy by increasing the taxes.  

• This situation arises due to the federal deficit where the expenses that are incurred by the government are more than the revenue collected as taxes.  

• In this context subsidy under the public distribution system, imposition of taxation and issue of bonds by the government are all part of the fiscal policy.

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