Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

Read the case study given below and answer the question :

The Budget document relates to the receipts and expenditure of the government for a particular financial year, the impact of it will be there in subsequent years. There is a need therefore to have two accounts, those that relate to the current financial year only one included in the revenue account ( also called revenue budget) and those that concern the assets and liabilities of the government into the capital account ( also called capital budget.)

Identify which is not the objective of the government budget ?

Options:

Allocation

Sterilisation

Redistribution

Stabilisation

Correct Answer:

Sterilisation

Explanation:

The correct answer is option (2) : Sterilisation

Here's why the other options are objectives of the government budget:

Allocation: The budget allocates resources towards different sectors and programs as per the government's priorities.

Redistribution: The government uses the budget to redistribute income and wealth by collecting taxes and using them for social welfare programs. 

Stabilisation: The budget can be used to influence economic stability through measures like taxation and spending to control inflation or promote economic growth.