Which of the following is NOT a objective of fiscal policy?
A. Economic growth
B. Price stability
C. Full employment
D. Control of money supply
Answer: Option D
Solution (By JKSSB Mock Tests)
Control of money supply is the objective of monetary policy. Fiscal policy aims at economic growth, price stability, full employment and equitable distribution of income.
Explanation:
The law of demand does not hold for Giffen goods (where income effect outweighs substitution effect) and Veblen goods (where higher price increases demand due to prestige value).
Explanation:
A Giffen good is an inferior good for which the negative income effect outweighs the substitution effect, resulting in an upward-sloping demand curve.
Explanation:
Empirical studies often find 'excess sensitivity' of consumption to current income, suggesting that liquidity constraints, myopia or other factors cause departures from pure permanent-income behaviour.
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