The Fiscal policy achieves the macroeconomic goals by using which of the following instruments? 

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SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 08 Aug, 2023 Shift 3)
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  1. Taxes
  2. SLR
  3. CRR
  4. Bank rate

Answer (Detailed Solution Below)

Option 1 : Taxes
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SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 02 Aug 2023 Shift 1)
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Detailed Solution

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The correct answer is Taxes.

Key Points

  • Fiscal policy:-
    • It refers to the government's use of taxation and spending to influence the economy.
    • The use of taxes as an instrument of fiscal policy can help to either stimulate or cool down the economy, depending on the government's goals.
    • Other instruments of fiscal policy include government spending, transfer payments, and subsidies. 

Additional Information

  • SLR:-
    • It refers to the percentage of deposits that banks must maintain in the form of liquid assets such as cash, gold, or government securities.
  • CRR:-
    • It refers specifically to the amount of cash that banks must keep in reserve.
  • Bank rate:-
    • It is the interest rate at which the central bank lends to commercial banks. 
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