Question

Give reasons or Explain the following statements. (Any Three) 

During the [eriod of depression deficit budgets is used.

Answer 1

During Deficit, Economics activities are at a low level. it results in unemployment, business loss and even bankruptcy and inflation etc. the government can borrow money and increase the expenditure on public works through deficit financing. This will increase employment and total effective demand for the goods and also the services which would then encourage investment. thus, a deficit budget is useful for removing depression and unemployment.