Which of the following is a key component of a government budget?
Practice Questions
Q1
Which of the following is a key component of a government budget?
Monetary policy
Fiscal deficit
Interest rates
Inflation targeting
Questions & Step-by-Step Solutions
Which of the following is a key component of a government budget?
Step 1: Understand what a government budget is. A government budget is a plan that outlines how much money the government expects to earn (revenue) and how much it plans to spend (expenditure).
Step 2: Learn about fiscal deficit. Fiscal deficit occurs when the government's total spending exceeds its total revenue.
Step 3: Recognize why fiscal deficit is important. It shows how much more money the government is spending compared to what it is earning.
Step 4: Conclude that fiscal deficit is a key component of a government budget because it helps to understand the financial health of the government.
