The single largest item of expenditure of the Central Government in India in recent years is
(A) Defence
(B) Subsidies
(C) Interest payment
(D) General services
Correct Answer : General services
Question Asked : SSC Combined Matric Level (Pre) Exam 2002, SSC CGL Tier-I Exam 2014
Explanation : Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and changes in the level and composition of taxation and government spending can affect the following variables in the economy: Aggregate demand and the level of economic activity; the pattern of resource allocation; and the distribution of income.
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