Question : Which budget should be adopted by government in case of moderate inflation.
Option 1: Deficit budget
Option 2: Surplus budget
Option 3: Balanced Budget
Option 4: Revenue Budget
Correct Answer: Balanced Budget
Solution : The correct answer is (c) Balanced Budget.
A balanced budget means that the government's total revenue equals its total expenditure. In this budget, the government's income from various sources, such as taxes, fees, and other revenue streams, matches its spending on public goods and services, welfare programs, infrastructure development, and other expenditures.
Adopting a balanced budget helps ensure fiscal discipline and stability in the economy. In the context of moderate inflation, a balanced budget helps prevent excessive government spending, which can contribute to inflationary pressures. By aligning revenue and expenditure, the government avoids creating additional demand in the economy, which can potentially exacerbate inflation.
Question : What is the difference between a balanced budget and a surplus budget?
Option 1: A balanced budget has equal spending and revenue, while a surplus budget has more revenue than spending
Option 2: A balanced budget has more spending than revenue, while a surplus budget has equal spending and revenue
Option 3: A balanced budget has more revenue than spending, while a surplus budget has equal spending and revenue
Option 4: A balanced budget has equal spending and revenue, while a surplus budget has more spending than revenue
Question : Which of the following is a measure of the size of the government budget?
Option 1: Fiscal deficit
Option 2: Revenue deficit
Option 3: Capital receipts
Option 4: Revenue deficit
Question : In case of inflationary situation in the economy government prepares?
Option 1: Deficit Budget
Option 2: Surplus Budget
Option 3: Both (a) and (b)
Option 4: None
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 : What is the difference between a balanced budget and a deficit budget?
Option 1: A balanced budget spends as much as it earns, while a deficit budget spends more than it earns
Option 2: A balanced budget earns as much as it spends, while a deficit budget spends more than it earns
Option 3: A balanced budget spends more than it earns, while a deficit budget earns more than it spends
Option 4: A balanced budget earns more than it spends, while a deficit budget spends as much as it earns
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