ECONOMIC STIMULUS

Subject: Economy

Context: Principal Economic Adviser Sanjeev Sanyal on Wednesday said the government recognises the need for further stimulus at an appropriate time to perk up the demand during pandemic

Concept:

Economic stimulus refers to targeted fiscal and monetary policy intended to elicit and economic response from the private sector.

Economic stimulus is a conservative approach to expansionary fiscal and monetary policy that relies on encouraging private sector spending to make up for losses of aggregate demand.

Fiscal stimulus measures are deficit spending and lowering taxes; monetary stimulus measures are produced by central banks and may include lowering interest rates.