UPSC 2021 › Indian Economy › Fiscal Policy & Budget

2 questions · 2021 · answers as per the UPSC key

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UPSC 2021 · Q3 · Indian Economy › Fiscal Policy & Budget · Save

Which among the following steps is most likely to be taken at the time of an economic recession?

(a) Cut in tax rates accompanied by increase in interest rate
(b) Increase in expenditure on public projects
(c) Increase in tax rates accompanied by reduction of interest rate
(d) Reduction of expenditure on public projects
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Answer: (b) Increase in expenditure on public projects
UPSC 2021 · Q11 · Indian Economy › Fiscal Policy & Budget · Save

The money multiplier in an economy increases with which one of the following?

(a) Increase in the Cash Reserve Ratio in the banks
(b) Increase in the Statutory Liquidity Ratio in the banks
(c) Increase in the banking habit of the people
(d) Increase in the population of the country
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Answer: (c) Increase in the banking habit of the people