State with reasons whether you agree or disagree with the following st

1.	State with reasons whether you agree or disagree with the following statement:For the period of depression, deficit budget is prepared.
Answer» Yes, I agree with this statement. Deficit budget is one where the estimated government expenditure is more than the l expected revenue. Normally developing countries have deficit budget. During depression, it is used as a stabilizing tool to control economic fluctuation. Recession occurs mainly due to lack of effective demand. So increase in government expenditure tends to increase the income of people. As a result, the aggregate demand increases, which will help in reducing unemployment and expanding the economic activities in the economy. Therefore, for the period of depression deficit budget is prepared.

State with reasons whether you agree or disagree with the following statement:For the period of depression, deficit budget is prepared.

Answer»

Yes, I agree with this statement.

Deficit budget is one where the estimated government expenditure is more than the l expected revenue.

Normally developing countries have deficit budget.

During depression, it is used as a stabilizing tool to control economic fluctuation. Recession occurs mainly due to lack of effective demand.

So increase in government expenditure tends to increase the income of people.

As a result, the aggregate demand increases, which will help in reducing unemployment and expanding the economic activities in the economy.

Therefore, for the period of depression deficit budget is prepared.