Match each type of government budget concept on the left with its corresponding macroeconomic implication or definition on the right.
- Balanced BudgetTotal proposed government revenue equals total proposed government expenditure.
- Surplus BudgetIntended to curb demand-pull inflation by withdrawing more spending power from the economy than is injected.
- Deficit BudgetDesigned to stimulate economic growth during a recession by injecting more spending power into the economy.
- Recurrent ExpenditureOngoing government operational expenses such as civil servant salaries and administrative maintenance.
Answer
Balanced Budget matches with total proposed revenue equaling total expenditure; Surplus Budget matches with curbing demand-pull inflation by withdrawing spending power; Deficit Budget matches with stimulating growth during a recession by injecting spending power; Recurrent Expenditure matches with ongoing government operational expenses.
Each budget type aligns strictly with its fiscal policy objective and structural definition: balanced budget balances revenues and spending, surplus reduces aggregate demand to control inflation, deficit expands demand during recessions, and recurrent expenditure represents routine operational spending.
Step-by-Step Solution
Key Concept
Government Budget Types and Fiscal Objectives