Question

A Deficit Budget is one in which:

Options

• \[\text{Government receipts} = 0\]

• \[\text{Government receipts} < \text{Government expenditure}\]

• \[\text{Government receipts} > \text{Government expenditure}\]

• \[\text{Government receipts} = \text{Government expenditure}\]

Answer 1

In a Deficit Budget, government receipts are less than government expenditure, meaning expenditure exceeds receipts. This type of budget is used during depression or recession to boost aggregate demand and is commonly used in welfare states.