fiscal policy Involes:
A taxes, spending and debt management
B. interest rates, money supply, bank oversight
C. taxes, interest rates, initial margin requirement
D. none of the above
Answer is A.
There are two policies that are central to any economy - fiscal policy and monetary policy. Fiscal policy is managed by the government whereas monetary policy is under the discretion of central bank.
Fiscal policy deals with the revenues and expenditure that the governemnt would make plus the borrowings that the government would require in order to fulfill the capital needs. Revenue of government is mostly taxes (direct and indirect). So this is in line with that in option a.
Interest rates (mentioned in option b and c) are within the ambit of monetary policy and hence option b and c are outrightly not our options.
fiscal policy Involes: A taxes, spending and debt management B. interest rates, money supply, bank oversight...
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