A deficit budget can be used to?

a

stimulate recovery from a trade depression

b

protect the economy from inflation

c

starve the economic of funds for economic development

d

provide measures to remedy the balance of payments

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Correct Option
b

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Discussions (6)

bloodhounds
1 year ago

When trying to counter deficit budget, the government will lower spending and increase taxes. This leads to inflation because there is more money in circulation which lead to inflation. I will say A, since there is money in circulation, we can then stimulate ourselves from trade depression.

Dean3518
10 years ago

D ans is A

Myschoop please give an explanation

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