n NISM Certifications
XV NISM Series XV
Medium

If the economy is ______, it is most likely to enable the government to implement expansionary fiscal policy.

Practice question from NISM XV Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Low Fiscal Deficit

    Correct answer

  2. B

    High Fiscal Deficit

  3. C

    Stagflation

  4. D

    Hyper inflation

Why this is the answer

A low fiscal deficit gives the government financial flexibility to inject funds into the economy to boost demand without excessive borrowing.

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