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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

The Government of India reduced its defence budget expenditure to increase its health budget expenditure during the COVID pandemic. Which objective of the budget the government was trying to achieve through this step?

Options:

Reallocation of Resources

Redistribution of Income

Economic Growth

Balanced regional development

Correct Answer:

Reallocation of Resources

Explanation:

The correct answer is Option (1) → Reallocation of Resources

Here's why:

  • Reallocation of Resources: This involves shifting resources from one sector (defense) to another (healthcare) based on changing priorities. In this case, the pandemic highlighted the critical need for increased healthcare spending to combat the virus.

  • How it differs from other options:

    • Redistribution of Income: This focuses on reducing income inequality, typically through taxes and social programs.
    • Economic Growth: The primary goal here is to increase the overall size of the economy.
    • Balanced regional development: This aims to reduce disparities in economic development across different regions of a country.

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