Question : What is the purpose of a stimulus package?
Option 1: To increase government spending
Option 2: To decrease taxes
Option 3: To encourage economic growth
Option 4: To pay down the national debt
Correct Answer: To encourage economic growth
Solution : The correct answer is (c) To encourage economic growth.
The purpose of a stimulus package is to stimulate or boost economic activity during times of economic downturn or recession. A stimulus package typically involves a set of measures implemented by the government to increase spending, encourage investment, and stimulate economic growth.
Stimulus packages often include a combination of policies such as increased government spending on infrastructure projects, tax cuts or rebates, financial assistance to businesses and individuals, and other measures aimed at boosting consumer and investor confidence.
While stimulus packages can involve some changes in government spending and taxation, the primary objective is to provide a temporary boost to the economy and promote economic growth, rather than paying down the national debt or implementing long-term fiscal measures.
