Fiscal stimulus implies 1 Increasing government expenditure 2 Reducing...........

Economic Affairs Tax System

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Fiscal stimulus implies:

1. Increasing government expenditure.

2. Reducing tax rates.

3. Increasing exports

4. Increasing interest rates.

Select the correct answer using the codes given below:

1and 2 only

1 and 3 only

All of the above

1 only

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Explanation:

Fiscal stimulus refers to increasing government consumption or transfers or lowering taxes. Effectively this means increasing the rate of growth of public debt, except that particularly Keynesians often assume that the stimulus will cause sufficient economic growth to fill that gap partially or completely.