Courses » SS2 » SS2 Economics » Economics Exam Topics » Meaning of Balanced Budget - Questions and Answers

Meaning of Balanced Budget - SS2 Economics Past Questions and Answers - page 1

1

What does a balanced budget mean?

A

Spending more than the income

 

B

Spending only as much as earned

C

Spending less than the income

correct option: b
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2

When is a government said to have a balanced budget?

A

When the expenses exceed the revenue generated

B

When the revenue generated is equal to the expenses

 

C

When the revenue generated is less than the expenses

correct option: b
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3

Why is a balanced budget considered a positive financial situation?

A

It helps to ensure financial stability and sustainability 

B

It encourages the accumulation of debt

C

It results in a negative balance

correct option: a

(A balanced budget is considered a positive financial situation because it helps to ensure financial stability and sustainability. This implies that the exact revenue derived is allocated to spend on a similar amount of expenses, ensuring that there is no instability in terms of income, price and employment of labour and resources)

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4

Write a simple definition of a balanced budget in one sentence.

A balanced budget is a situation where expenses are equal to or less than the income or revenue generated within a specific period.

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