The fiscal policy stance of the Government can affect:

  1. Aggregate demand
  2. Resource allocation
  3. Distribution of Income

Select the correct option from the codes given below:

Answer: [D] 1, 2 & 3

Changes in the level and composition of taxation and government spending can impact on the following variables in the economy:
• Aggregate demand and the level of economic activity;
• The· pattern of resource allocation;
• The distribution of income

This question is a part of GKToday's Integrated IAS General Studies Module