Question : A budget that includes a deficit is:
Option 1: Expansionary
Option 2: Contractionary
Option 3: Neutral
Option 4: None of the above
Correct Answer: Expansionary
Solution : The correct answer is (a) Expansionary
Such a budget is considered expansionary because it stimulates economic growth and activity. When a government runs a deficit, it typically borrows money by issuing bonds or taking loans to cover the shortfall. This increased borrowing injects more money into the economy, which can lead to increased spending, investment, and overall economic growth.
It's important to note that the expansionary nature of a budget deficit depends on the economic context and the specific measures implemented by the government. In some cases, if the deficit is too large or unsustainable, it can have negative consequences, such as inflation, higher interest rates, and increased debt burden. However, generally speaking, a budget that includes a deficit is considered expansionary.
Question : A budget that is in balance is:
Question : A government budget that includes provisions for an economic downturn is known as:
Option 1: A countercyclical budget
Option 2: A balanced budget
Option 3: A deficit budget
Option 4: A surplus budget
Question : A government budget that is balanced over the long term is called:
Option 1: A stable budget
Option 2: A dynamic budget
Option 3: A cyclically balanced budget
Question : Which of the following is a part of budgetary deficit.
Option 1: Revenue deficit
Option 2: Fiscal deficit
Option 3: Primary deficit
Option 4: All of the above.
Question : Fill in the blanks- ____________________= Revenue expenditure - Revenue receipts.
Option 1: Capital deficit
Option 2: Budgetary deficit
Option 3: Revenue deficit
Option 4: None of the above.
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