To increase the level of income govt should reduce crr.

Banks have more

funds for loans and so investment ll increase profit ll increase

To encourage private investment govt should decrease plr.so low

interest loan is available for investors and this would encourage private
investment

If the economy goes into recession, taxes fall, govt spending rises and the
govt budget moves towards deficit. So if a strict balacnd budget rule is
applied govt would be forced to look for ways to raise tax or cut
spending. This would eliminate excess spending and budget deficit
would be maintained at the same level.

Due to increase in income level consumption ll be increased for short

run but for long run it would not

Savings in short run ll increase as income increases. Due to increase in

income level imports would rise in long run and trade balance would be
deficit.