Question

Which one is not the main objective of fiscal policy in India?
A) To increase liquidity in the economy B) To promote price stability C) To minimize the inequalities of income & wealth D) To promote employment opportunity

Answer 1

Hey dear here's ur ans

Answer:

To increase liquidity in the economy is not the main objectives of fiscal policy of India because there are lots of factors which are not under control of Indian Govt. Moreover, fiscal policy is made just for better utilization of financial resources of Government of India.

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Answer 2

Answer:

The correct option is A i.e, To increase liquidity in the economy

Explanation:

Fiscal policy is the policy used by Government of India to maintain and control the situation of Economy in the condition of Inflation and deflation.

Government use different instrument such as Taxation, Public Debt and Expenditure to control the condition of Inflation and Deflation under Fiscal policy.

The objective of Fiscal policy are:

1. To maintain price stability

2. Aggregate Demand and Aggregate Supply should be Equilibrium.

3. To maintain full employment

4. To maintain liquidity in economy

5. To maintain equilibrium of balance of payment

The objective of fiscal policy is to maintain liquidity not to increase liquidity.

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