what are the basic objectives of a government budget ?-explain them briefly.(4mark)
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government budget is a statement of expected receipts and expenditure of the government during fiscal year . main objective of government budget are -
1. Redistribution of income and wealth
2. Reallocation of resources
3. economic growth
4. managing public enterprises
5. economic stability
1. Redistribution of income and wealth
2. Reallocation of resources
3. economic growth
4. managing public enterprises
5. economic stability
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The basic objectives of a government budget are as follows:
1. Reallocation of resources through tax concessions or subsidies ensure investment by producers within an economy. For example government discourages the use of cigarettes through taxing them heavily and encourages production of medicines by giving subsidies to producers.
2. Economic stability ensures that there are no fluctuations of inflation or deflation in business activities. It aims to control inflation through budgetary policies.
3. Economic growth which is dependent on the rate of saving and investment. So the government makes various provisions in the budget to raise overall rate of savings and investments in the economy.
4. Reducing inequalities in income and wealth is an important part of every economic system. Government aims to influence distribution of income by imposing taxes on the rich and spending more on the welfare of the poor.
1. Reallocation of resources through tax concessions or subsidies ensure investment by producers within an economy. For example government discourages the use of cigarettes through taxing them heavily and encourages production of medicines by giving subsidies to producers.
2. Economic stability ensures that there are no fluctuations of inflation or deflation in business activities. It aims to control inflation through budgetary policies.
3. Economic growth which is dependent on the rate of saving and investment. So the government makes various provisions in the budget to raise overall rate of savings and investments in the economy.
4. Reducing inequalities in income and wealth is an important part of every economic system. Government aims to influence distribution of income by imposing taxes on the rich and spending more on the welfare of the poor.
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