Question

State the merits and demerits of an unbalanced budget.5mark B.A

Answer 1

The one major merit of unbalanced budget is that it gives the opportunity to the government to spend even when there is a deficit. And if done properly, this action could create demand, which could turn the economy around.

The biggest demerit is that political opposition gets the fodder to attack the government on that front. Sometimes unbalanced budget can lead to severe crunch in the market at least in the short term.