National Budget

Question 1

What is the national budget

Answer 1

The national budget is an estimate of the govts spending and revenue for a fiscal year. It is presented to the parliament each year for debate.

Question 2

The 2 main obj of the budget are to

Answer 2

Announce the govts plan for spending and revenue collection
Influence the state of the economy through fiscal policy

Question 3

When is the budget surplus

Answer 3

When the govts revenue from taxation is more than its expenditure
govt rev&raquo_space; exp

Question 4

What is a budget deficit

Answer 4

If the govts revenue from taxation is less than the expenditure

Question 5

What is a balanced budget

Answer 5

If the govts revenue from taxation is equal to its expenditure

Question 6

What is the fiscal policy

Answer 6

Using the public spending and taxation, the govt can influence the level of national income in the economy

Question 7

Govt spending is ______ while taxation is a ____

Answer 7

Govt spending is an injection while taxation is a withdrawal

Question 8

If the govt expenditure > taxation

Answer 8

There is a net injection and national income increases, this is suitable for helping reduce unemployment

Question 9

If taxation > govt ependiture

Answer 9

There is a net withdrawal and national income decreases, this can be applied if inflation is too high

Question 10

If taxation is > govt spending, what does it imply

Answer 10

This implies that the govt may deliberately imbalance the budget to achieve an increase/decrease in national income