NABTEB Economics 2024 Objective — Question 40
Question 40 of 50 from the National Business and Technical Examinations Board (NABTEB) Economics 2024 Objective paper, with the correct answer and a full explanation.
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Expansionary fiscal policy implies
- A. A. decreasing bank loans
- B. B. raising tax rates
- C. C. increasing the bank rate
- D. D. decreasing tax ratesCorrect
Explanation
Fiscal policy is the use of fiscal policy instrument such as taxation, budget, government revenue, expenditure etc in regulating the economy. However, a decrease in tax rates is aimed at stimulating economic activities (Expansionary fiscal policy) while the opposite is the case for a contractionary fiscal policy.
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