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Topic Fiscal policy
Asked 6 times across 3 UPSC exams over 41 years (1985–2026), peaking in 2021.
Key insights
- Most tested in CSE — 3 of 6 PYQs
- Most asked in 2021
- Recurs across 5 years (1985–2026)
How it travelled across exams
First appearance in each exam — the same idea, reframed.
CSE 1985 → CAPF 2021 → CDS 2022
How the concept evolved
Rising — more than half its appearances (5 of 6) are since 2016.
Related concepts
Ideas UPSC tests alongside this one — keep exploring.
Sample questions
You've seen the pattern — here are a few of the actual PYQs.
CSE2026
Which one of the following best describes the 'Crowding Out Effect' in the context of fiscal policy?
- A A situation where private investment increases due to increased Government spending
- B A situation where Government borrowing leads to higher interest rates, which reduces private investment ✓
- C A situation where an increase in taxes leads to increased private sector investment
- D A situation where Government spending has no impact on aggregate demand
✓ Correct answer: (B)
Economy › Public Finance & Budget
CDS2025
Consider the following statements about Union Government's Expenditure on revenue account and effective capital expenditure
- Effective capital expenditure as percentage of GDP has increased from 2020 – 21 to 2023 – 24
- Expenditure on revenue account as percentage of GDP has increased from 2020 – 21 to 2023 – 24
Which of the statements given above is/are correct ?
- A 1 only
- B 2 only
- C Both 1 and 2
- D Neither 1 nor 2
Answer key not yet available (pending official release)
Economy › Public Finance & Budget
CDS2022
Who among the following, first mooted the idea of deficit financing ?
- A Adam Smith
- B Alfred Marshall
- C John Maynard Keynes ✓
- D Milton Friedman
✓ Correct answer: (C)
Economy › Macroeconomics
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