Question

Mention any one merit of unbalanced budget.

Give the merits of an unbalanced budget.

Answer 1

Prof. Keynes and other modern economists have pointed out the following merits:

1. Unbalanced budget (deficit budget) is a powerful instrument for generating higher level of income and employment.
2. Unbalanced budget (deficit budget) is a solution to tackle the problem of unemployment as well as over employment in an economy.
3. Budget deficit is a cure for deflation, as it prevents downward movement of prices.
4. Given the gradual increase in prices, which indicates a stimulator of economic growth, the deficit budget is welcomed.
5. It contributes to the social welfare.
6. It provides a solution for deflation.