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Economy2011
Which one of the following statements appropriately describes the “fiscal stimulus”?

Explanation

The correct option describes fiscal stimulus as an intentional government strategy aimed at invigorating economic activity, particularly during periods of recession or economic slowdown. This typically involves measures such as increased public spending, tax cuts, or financial assistance to businesses and individuals, which in turn can lead to higher consumption, investment, and job creation. Such actions are grounded in Keynesian economics, which posits that proactive government intervention can effectively counteract economic downturns and foster recovery.

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