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Question : The intervention of the government whether to expand demand or reduce it constitutes the ___________.

Option 1: speculative function

Option 2: redistribution function

Option 3: stabilisation function

Option 4: transaction function


Team Careers360 21st Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: stabilisation function


Solution : The correct answer is the stabilisation function .

One of the aims that governments attempt to attain by manipulation of fiscal and monetary policy is economic stabilisation (e.g., full employment, inflation management and an equitable balance of payments). Restriction conditions may be required in such cases to decrease demand. The government's intervention, whether to increase or decrease demand, is the stabilisation function.

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