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Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
4. What are the objectives of fiscal policy? Explain it types and how it is different from monetary policy? (250 words)
Difficulty level: Easy
Reference: Insights on India
Why the question:
The question is part of the static syllabus of General studies paper – 3 and mentioned as part of Mission-2022 Secure timetable.
Key Demand of the question:
To write about fiscal policy, its types and its difference with monetary policy.
Directive word:
Explain – Clarify the topic by giving a detailed account as to how and why it occurred, or what is the context. You must be defining key terms wherever appropriate and substantiate with relevant associated facts.
Structure of the answer:
Introduction:
Begin by defining Fiscal policy.
Body:
First, write the various objectives of Fiscal policy – economic growth, to reduce income and wealth inequalities, To provide employment opportunities and To ensure stability in prices etc.
Next, explain the various types of fiscal policy – Neutral, Expansionary and Contractionary fiscal policy.
Next, write the differences between fiscal and monetary policy.
Conclusion:
Conclude by summarising.
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