Question

A deficit budget leads to an increase in the liability of the government or a decrease in its reserves.

• A. True
• B. False

Answer 1

The correct option is A True

Deficit budget is the type of budget where the estimated government expenditure is greater than the estimated government revenue due to which there is a deficit in the budget. Deficit budget is usually regarded as a negative indicator for the economy as it increases the liability of the government or decreases the reserves of the government.