Question : The process of collecting taxes in order to fund government expenditures is known as:
Option 1: Fiscal policy
Option 2: Monetary policy
Option 3: Budgetary policy
Option 4: Taxation policy
Correct Answer: Taxation policy
Solution : The correct answer is (d) Taxation policy.
Taxation policy refers to the process of collecting taxes from individuals, businesses, and other entities to generate revenue for the government. It involves setting tax rates, determining tax bases, and implementing tax laws and regulations. Taxation policy is an essential component of fiscal policy, which encompasses the government's use of taxation and government spending to influence the economy. By collecting taxes, the government funds its various expenditures, including public services, infrastructure development, defense, healthcare, education, and social welfare programs.
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