ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The government can use budget surplus as a means to clear debt, saving for future expenses or invest in infrastructure or other programmes.

Detailed explanation-2: -When the government borrows Rs 100 at say 6% annual interest, it is supposed to repay Rs 106 at the end of the year. But if inflation is running at 6%, then the effective burden of the debt servicing cost is zero, because inflation has eroded the burden of interest.

Detailed explanation-3: -Rationalizing the subsidies and reduction in government spemding, will lower the expenditure of the government while spending on welfare schemes or expanding Industries will only increase spending.

Detailed explanation-4: -A budget surplus is when a body (such as the U.S. government) spends less money during an accounting period than it takes in through revenue. A deficit is when spending is higher than revenue, requiring the government to borrow money in order to finance its activities.

Detailed explanation-5: -Work out a budget and deal with priority debts. Consolidate or refinance loans. Get help with late-paying customers. Gain better control over your cashflow. Reduce unnecessary spending. Boost your revenue. Engage your staff and seek their input. Consider your emotional wellbeing when tackling debt. More items