Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: There is automatic change in the net tax revenue when level of output changes. Reason R: Automatic stabilization moderate aggregate spending in times of boom and slow down. In the light of the above statements, choose the most appropriate answer from the options given below:
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Fiscal and monetary policy effectiveness has come up 30 times in 7 exams since 2010.
This question is on Fiscal policy, stabilisers and Ricardian equivalence, part of Fiscal and monetary policy effectiveness in Macroeconomics.
The tools of fiscal policy, how the budget stabilises the economy on its own, and when deficits do not matter.
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Question from the CUET-PG 2022 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.