Question

A deficit budget proves to be useful during the periods of ____________.

• A. inflation
• B. high employment
• C. depression
• D. none of the above

Answer 1

Answer: (C)

depression

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 but it is regarded to be useful at the time of depression in the economy as it results in reduced taxes or increased public expenditure that resolves the situation of the depressed economy.