Page 152 - DMGT401Business Environment

Unit 6: Fiscal Policy

5. Analyse open market operations and selective credit control as measures to control money Notes
supply in the economy.
6. "Supply of money is a sensitive issue as even a slight imbalance can create havoc". Elaborate.

7. "It is through fiscal policy that the government tries to correct inequalities of income and
wealth". Discuss.
8. How does the budget of Central Governments differ from the budgets of the State
Governments?
9. "Taxes are considered effective to control inflation". Justify the statement.
10. What is the difference between public debt and deficit? Explain giving examples.

11. "A smart business person always keeps an eye on the fiscal policy". Substantiate.
12. Critically analyse the New Trade Policy of 1991 vis-à-vis the Foreign Trade Policy of
2002-07.

13. Compare and contrast between direct and indirect taxes. Give examples to support your
answer.
14. Which is more painful, direct or an indirect tax? Why? What are the advantages that both
hold?
15. Discuss the basic issues involved in deficit financing and unplanned expenditures.

Answers: Self Assessment

1. False 2. True

3. False 4. False
5. True 6. True
7. True 8. False
9. Old/Broad 10. Open Market Operations
11. Statutory Liquidity Ratio 12. Selective Credit Control

13. Revenue Expenditure 14. Money Supply
15. Target Plus 16. Indirect Taxes

6.9 Further Readings

Books Pandey GN, Environment Management, Vikas Publishing, New Delhi
Paul Justin, Business Environment: Text and Cases, Tata McGraw Hill, New Delhi
Saleem Sheikh, Business Environment, Pearson Education, New Delhi

Vivek Mittal, Business Environment, Excel Books, New Delhi

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