Question : A budget that is in balance is:
Option 1: Expansionary
Option 2: Contractionary
Option 3: Neutral
Option 4: None of the above
Answer (1)
3rd Jan, 2024
Correct Answer: Neutral
Solution : The correct answer is (c) Neutral.
A budget that is in balance means that government revenue matches government spending, resulting in neither a deficit nor a surplus. In other words, the amount of money collected through taxes and other sources is equal to the amount of money spent on government programs and services. This balanced budget approach is considered neutral because it neither stimulates nor contracts the economy.
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