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:

The correct answer is option 3: Economic stability

The policies of a surplus budget during inflation and a deficit budget during deflation are aimed at stabilizing the economy by controlling economic fluctuations. These policies help in managing inflation and deflation to ensure stable economic conditions. A surplus budget helps to reduce inflation by decreasing aggregate demand, while a deficit budget helps to stimulate the economy during deflation by increasing aggregate demand.