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Which of the following is not an objective of Fiscal policy?
  • a)
    Economic growth
  • b)
    Economic stability
  • c)
    Maximization of employment level
  • d)
    Regulating of financial institutions
Correct answer is option 'D'. Can you explain this answer?
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Which of the following is not an objective of Fiscal policy?a)Economic...
Main objectives of Fiscal Policy of India:
1. Development by effective Mobilisation of Resources by Taxation, Public Savings and Private Savings
2. Efficient allocation of Financial Resources
3. Reduction in inequalities of Income and Wealth
4. Price Stability and Control of Inflation
5. Employment Generation
6. Balanced Regional Development
7. Reducing the Deficit in the Balance of Payment
8. Capital Formation
9. Increasing National Income
10. Development of Infrastructure
11. Foreign Exchange Earnings
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Most Upvoted Answer
Which of the following is not an objective of Fiscal policy?a)Economic...
Objective of Fiscal Policy
Economic growth, economic stability, and maximization of employment level are the main objectives of fiscal policy.

Explanation
- Economic Growth: Fiscal policy aims to promote economic growth by influencing the level of aggregate demand in the economy through government spending and taxation. By increasing government spending or cutting taxes, fiscal policy can stimulate economic activity and encourage growth.
- Economic Stability: Fiscal policy also plays a crucial role in maintaining economic stability by helping to prevent or mitigate economic downturns. During times of recession, the government can use fiscal policy tools to boost demand and stabilize the economy.
- Maximization of Employment Level: Another key objective of fiscal policy is to maximize employment levels in the economy. By stimulating economic growth and increasing demand, fiscal policy can create job opportunities and reduce unemployment rates.
- Regulation of Financial Institutions: While the regulation of financial institutions is important for maintaining a stable financial system, it is not a primary objective of fiscal policy. This task is typically handled by regulatory agencies and central banks, rather than through fiscal measures such as government spending or taxation.
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Features of a Mixed Economy:A mixed economy is an economic system that combines elements of both a market economy and a planned economy. It incorporates features of both private enterprise and government intervention. The correct answer is D, as all of the following features are characteristic of a mixed economy:1. Planned economy:A mixed economy includes elements of a planned economy, where the government plays a role in guiding and regulating economic activities. It formulates economic plans and policies to ensure the efficient allocation of resources and to promote economic stability.2. Dual system of pricing:In a mixed economy, there exists a dual system of pricing, which means that both market prices and government-set prices coexist. While market forces determine prices for most goods and services, the government may intervene to regulate prices in certain sectors to protect consumers or promote social welfare.3. Balanced regional development:Another characteristic of a mixed economy is the emphasis on balanced regional development. The government intervenes to ensure that economic growth and development are not concentrated in specific regions or industries but are spread across different regions and sectors. This helps to reduce regional disparities and promote overall economic stability and social welfare.Benefits of a Mixed Economy:A mixed economy offers several benefits due to its combination of market forces and government intervention. Some of these benefits include:1. Economic efficiency:By incorporating market mechanisms, a mixed economy allows for resource allocation based on supply and demand, which promotes economic efficiency. Market forces encourage competition, innovation, and productivity, leading to higher levels of economic growth.2. Social welfare:Government intervention in a mixed economy enables the provision of public goods and services that may not be adequately provided by the market alone. This includes areas such as healthcare, education, infrastructure, and social security, ensuring a certain level of social welfare and equity.3. Stability and regulation:The government's role in a mixed economy helps to maintain economic stability through macroeconomic policies such as fiscal and monetary measures. It also regulates certain sectors to prevent market failures, protect consumer rights, and ensure fair competition.Conclusion:A mixed economy combines the advantages of both market forces and government intervention. It allows for economic efficiency, social welfare, and stability. The features of a mixed economy include elements of a planned economy, a dual system of pricing, and balanced regional development. These features work together to create a system that promotes both economic growth and social welfare.

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Which of the following is not an objective of Fiscal policy?a)Economic growthb)Economic stabilityc)Maximization of employment leveld)Regulating of financial institutionsCorrect answer is option 'D'. Can you explain this answer?
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