Q.

Surplus budget is recommended during

A. Boom
B. Depression
C. Famines
D. War
Answer» B. Depression
Explanation: Surplus budget is a budget in which government receipts arc greater than government expenditures. Such a budget is desired when the economy is battling inflation due to excess aggregate demand (AD). Surplus budget plugs the inflationary gap by lowering the level of aggregate demand. AD is lowered on account of (i) rise in revenue collection by the government and (ii) fall in government expenditure.
2.8k
0
Do you find this helpful?
12

View all MCQs in

Economics (GK)

Discussion

No comments yet