For Deficit Reduction. Arrange the following in the correct sequence.
A. Deficit Budget
B. Increase the taxes
C. Calculation of receipts and Expenditure - Financial year
D. Frame policy to Balance the Budget
E. Expenditure is more than Receipts
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 1
The correct answer is option (1) : C, E, A, D, B
Here's the breakdown of the logical sequence for deficit reduction:
Calculation of receipts and Expenditure - Financial year (C): This is the first step, where the government assesses its income (receipts) and spending (expenditure) for the upcoming financial year.
Expenditure is more than Receipts (E): If the calculated expenditure is greater than the receipts, it signifies a deficit budget.
Deficit Budget (A): This identifies the problem - a budget where spending exceeds income.
Frame policy to Balance the Budget (D): Once the deficit is identified, the government needs to create a plan to achieve a balanced budget (where expenditure equals or is less than income).
Increase the taxes (B): Depending on the policy, increasing taxes could be one of the strategies to generate more income and reduce the deficit.
This sequence follows a logical flow from identifying the problem (deficit) to creating a plan (policy) and potentially implementing a solution (increasing taxes) to achieve a balanced budget.