Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

The government in its budget has announced the construction of seven textile parks under the scheme of mega-investment textile parks. Which objective of the government budget is most likely being reflected here? (Choose the correct alternative).

Options:

Reallocation of resources  

Redistribution of income

Bringing economic stability 

Reducing fluctuations in the general price level

Correct Answer:

Reallocation of resources  

Explanation:

In the above question, the construction of seven textile parks under the scheme of mega-investment textile parks is being done with government revenue. The allocative function in budgeting determines on what government revenue will be spent.  Government usually spends the amount on the production of public goods, which are non-rival and non-excludable in nature.