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Fiscal policy refers to the use of A Monetary tools by RBI B Government expenditure and taxation C Banking regulations D Credit control measures Explanation Fiscal policy involves government decisions on spending, taxation, and borrowing to influence the economy. The main objective of fiscal policy is to achieve A Maximum taxation B Economic stability and…

Fiscal deficit refers to the excess of A Revenue expenditure over revenue receipts B Total expenditure over total receipts excluding borrowings C Capital expenditure over capital receipts D Revenue receipts over revenue expenditure Explanation Fiscal deficit shows the gap financed by borrowings. Fiscal deficit indicates A Inflation rate B Government borrowing requirement C Revenue surplus…

Revenue expenditure refers to government expenditure which A Creates assets B Reduces liabilities C Is recurring in nature D Is incurred once Explanation Revenue expenditure is incurred regularly for administration and welfare without creating assets. Which of the following is a revenue expenditure? A Construction of highways B Purchase of machinery C Payment of salaries…

A government budget is best defined as A A statement of assets and liabilities B An annual financial statement of receipts and expenditures C A report of public debt D A plan of monetary policy Explanation Government budget is an annual statement showing estimated receipts and expenditures for a financial year. The main purpose of…

The accelerator principle explains the relationship between A Income and consumption B Investment and consumption C Investment and changes in income D Saving and investment Explanation Accelerator shows how changes in income lead to changes in induced investment. According to the accelerator, investment depends mainly on A Level of income B Rate of interest C…

The consumption function shows the relationship between A Consumption and saving B Consumption and income C Saving and income D Investment and income Explanation Consumption function explains how consumption changes with changes in income. Keynes assumed that consumption depends primarily on A Interest rate B Price level C Income level D Population Explanation According to…

Effective demand in Keynesian theory refers to A Desire backed by purchasing power B Total demand for goods C Demand that actually determines output and employment D Potential demand at full employment Explanation Effective demand is the point where aggregate demand equals aggregate supply, determining actual output and employment. According to Keynes, employment depends upon…

According to the classical economists, full employment is achieved when A Aggregate demand equals aggregate supply B All willing workers get jobs at prevailing wage rate C Government intervenes in the economy D Money supply is increased Explanation Classical theory assumes wage flexibility ensures that all those willing to work at the ruling wage rate…

Money market refers to the market for A Long-term funds B Medium-term funds C Short-term funds D Equity shares Explanation Money market deals with short-term funds, usually up to one year. Capital market deals in A Short-term credit B Long-term funds C Currency exchange D Consumer goods Explanation Capital market provides long-term finance for investment.…

A bank is best described as an institution that A Prints currency B Accepts deposits and advances loans C Controls inflation D Regulates stock market Explanation Banks mobilize deposits and lend funds, acting as financial intermediaries. The primary function of commercial banks is A Issue currency B Accept deposits C Regulate money supply D Control…