Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:
Policies of surplus budget during inflation and deficit budget during deflation helps to maintain ...........in the economy.
Which of the following option fits best in the above blank?
Options:
Resource allocation
Economic Growth
Economic stability
Public enterprises
Correct Answer:
Economic stability
Explanation:
Surplus budget controls inflation while the deficit budget boosts economic activity during times of deflation. The budget is thus used as a stabilisation tool.