gs1medium
Which one of the following statements appropriately describes the "fiscal stimulus"?
- A.It is a massive investment by the Government in manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth.
- B.It is an intense affirmative action of the Government to boost economic activity in the country
- C.It is Government's intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation
- D.It is an extreme affirmative action by the Government to pursue its policy of financial inclusion
▶ Answer & Explanation
Correct answer: B. It is an intense affirmative action of the Government to boost economic activity in the country
Fiscal stimulus refers to deliberate measures taken by the government, typically through increased spending or tax cuts, to stimulate aggregate demand and boost economic activity during periods of slowdown or recession. It aims to encourage consumption and investment, thereby reviving growth.
Source: UPSC gs1 2011