Reasons for Balanced Budget - SS2 Economics Past Questions and Answers - page 1
What is the main benefit of a balanced budget?
Financial instability
Fiscal responsibility
Accumulation of debt
How can a balanced budget promote economic growth?
By reducing investment
By increasing job creation
By creating an unstable economic environment
What does a balanced budget help individuals, organizations, and governments to do?
Spend recklessly
Prioritize spending
Borrow excessively
Why is excessive borrowing discouraged?
It leads to debt and financial turmoil
It promotes fiscal responsibility
It creates a stable economic environment
Discuss financial stability as a reason for a balanced budget.
A balanced budget helps to ensure financial stability by preventing excessive borrowing, which can lead to debt and financial turmoil. By spending only what is earned or generated in revenue, individuals, organizations, and governments can avoid financial instability and reduce the risk of bankruptcy.
How can a balanced budget promote economic growth?
A balanced budget can promote economic growth by creating a stable economic environment that is attractive to investors, leading to increased investment and job creation.