Question : Which of the following is a tool for fiscal consolidation?
Option 1: Tax cuts
Option 2: Increased government spending
Option 3: Deficit financing
Option 4: Austerity measures
Answer (1)
14th Jan, 2024
Correct Answer: Austerity measures
Solution : The correct answer is (d) Austerity measures.
Austerity measures refer to policies implemented by governments to reduce budget deficits and achieve fiscal consolidation. These measures typically involve reducing government spending and increasing taxes to control borrowing and reduce the fiscal deficit.
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