ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The correct option is B. Deficit budget. When the government incurs more public expenditure for governmental projects then its expenditure exceeds its revenue, and this is called deficit budget.

Detailed explanation-2: -A deficit budget is said to have occurred when expenses exceeds the revenue and it is a symptom of financial health. The government normally uses this term to its spending instead of entities or individuals. Accrued government deficits form the national debt.

Detailed explanation-3: -What is the Difference Between the Federal Budget Deficit and the Federal Government Debt? A federal budget deficit occurs when government spending outpaces revenue or the income drawn from taxes, fees, and investments. Deficits add to the national debt or federal government debt.

Detailed explanation-4: -Solution. No, the above statement is not correct. This is because surplus budget refers to the excess of government revenue over the government expenditure. In other words, when government revenue is greater than its expenditure, it is called a surplus budget.

Detailed explanation-5: -Fiscal policy that increases aggregate demand directly through an increase in government spending is typically called expansionary or “loose.” By contrast, fiscal policy is often considered contractionary or “tight” if it reduces demand via lower spending.