The government can influence private sector expenditure by 1. taxation 2. subsidies 3. macro-economic policies 4. grants Select the correct answer using the codes given below

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Q: 26 (CDS-I/2013)
The government can influence private sector expenditure by—
1. taxation
2. subsidies
3. macro-economic policies
4. grants

Select the correct answer using the codes given below—

question_subject: 

Economics

question_exam: 

CDS-I

stats: 

0,93,50,93,13,28,9

keywords: 

{'private sector expenditure': [0, 0, 0, 1], 'subsidies': [1, 0, 0, 1], 'taxation': [0, 0, 0, 3], 'grants': [2, 0, 1, 0], 'government': [5, 0, 0, 1]}

The correct answer is option 1 - 1, 2, 3, and 4.

1. Taxation: The government has the power to levy taxes on individuals and businesses. By increasing or decreasing taxes, the government can influence the amount of disposable income in the private sector, which can impact expenditure.

2. Subsidies: The government can provide financial assistance to certain industries or businesses in the form of subsidies. This can encourage increased spending and investment in those sectors, leading to a boost in private sector expenditure.

3. Macro-economic policies: The government can implement various macro-economic policies, such as adjusting interest rates, controlling inflation, or regulating exchange rates. These policies affect the overall economy and can have an impact on private sector expenditure.

4. Grants: The government can provide grants to businesses or individuals for specific purposes, such as research and development or infrastructure projects. By funding these initiatives, the government can indirectly influence private sector expenditure.

Therefore, all four options listed - taxation, subsidies, macro-economic policies, and grants - are ways in which the government can influence private sector expenditure.

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