Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

Which of the following is a measure to reduce the fiscal deficit?

Options:

Reduction in wasteful expenditure

Increasing the existing tax rate

Increase in non-tax revenue receipts

All of the above

Correct Answer:

All of the above

Explanation:

In order to reduce the fiscal deficit, we can either reduce the public expenditure or increase the revenue:

  1. Measures to reduce public expenditure: reduction in wasteful expenditure i.e. subsidies, reducing the non-plan expenditure etc.
  2. Measures to increase revenue: Increase in existing tax rate, Increase in non-tax revenue receipts etc.