ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a balanced budget.
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a surplus budget.
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a deficit budget
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one appropriate for current economic conditions.
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Detailed explanation-1: -Deficit budgets are better suited for developing economies. Whenever there is a recession, a deficit budget will help in generating employment and boost the economy.
Detailed explanation-2: -Deficit budget is usually regarded as a negative indicator for the economy but it is regarded to be useful at the time of depression in the economy as it results in reduced taxes or increased public expenditure that resolves the situation of the depressed economy.
Detailed explanation-3: -A budget is an estimate of income and expenditure for a future period as opposed to an account which records financial transaction.
Detailed explanation-4: -The outcome budget is a progress card on what various departments have done with the amount assigned in the previous annual Budget. It measures the outcomes of all government programmes and whether the money has been spent for the purpose it was sanctioned.