Question

A Surplus Budget is used during inflation primarily to:

पर्याय

• Increase aggregate demand

• Keep receipts exactly equal to expenditure

• Boost output and employment during recession

• Reduce aggregate demand

Answer 1

During inflation, a Surplus Budget (receipts greater than expenditure) is used to reduce aggregate demand, which may reduce inflationary pressure. Raising aggregate demand is instead the objective of a deficit budget during recession.