Question 42
Public FinanceA deficit budget can be used to
- A.stimulate recovery from a trade depression
- B.protect the economy from inflation
- C.starve the economy of funds for economic development
- D.provide measures to remedy the balance of payments
Show the answer and explanation
Answer: A (stimulate recovery from a trade depression)
Explanation
Spending more than revenue injects money into the economy, raising demand and helping recovery from a depression.