Question on: SS2 Economics - Meaning of Balanced Budget

Why is a balanced budget considered a positive financial situation?

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A

It helps to ensure financial stability and sustainability 

B

It encourages the accumulation of debt

C

It results in a negative balance

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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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