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Government Budget and Economy — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsGovernment Budget and Economy3 Marks
Question
Is balanced budget good for India?
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Answer

  1. It is one when estimated revenues are equal to estimated expenditures. In other words, amount of tax is equal to the amount of expenditure.
  2. This kind of budget leads to slight increase in aggregate demand.
  3. Balanced budget is a good policy which can bring an economy to a full employment equilibrium level. It brings about financial stability.
  4. But it is not good for a less developed country like India.
  5. In such a country, the government should have more expenditures (than revenue) which will raise aggregate demand.

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