Types of budgets, Managerial Economics

Assignment Help:

TYPES OF BUDGETS

1.     Deficit budget 

If the proposed expenditure is greater than the planned revenue from taxation and miscellaneous receipts, this is a budget deficit. The excess of expenditure over revenue will be met through borrowing both internally through the sale of Treasury Bills and externally from other organisations.

2.     Balanced budget

If the proposed expenditure is equal to the planned revenue from taxation and other miscellaneous receipts, this is a balanced budget.  Usually, balanced budgets are not presented, unless the expenditure is very limited.  It would mean the government would have to over-tax the population which can create disincentives.  It is to avoid this that the tax revenue is supplemented by borrowing.

3.     Surplus budgets

If the proposed expenditure is less than the planned revenue from taxation and other miscellaneous receipts, this is a surplus budget.  Usually, surplus budgets are not presented for they are deflationary and can create unemployment as the government takes out of the economy more than it puts back.


Related Discussions:- Types of budgets

Law of demand, explain the law of demand. briefly discuss the exception to ...

explain the law of demand. briefly discuss the exception to the law of demand

Illustrate the sources of monopoly, Q. Illustrate the sources of monopoly? ...

Q. Illustrate the sources of monopoly? Merger for Large-scale Production: Thirdly monopoly undertaking can be a consequence of the necessity to produce on a large scale to de

Real rigidities in the credit market, Real Rigidities in the Credit Market ...

Real Rigidities in the Credit Market How imperfections in the goods markets enable firms  to  set  prices  so  as to  generate  price  rigidities,  e.g.,  because of countercy

Real rigidities in the goods market, Real Rigidities in the Goods Market  ...

Real Rigidities in the Goods Market   The most important factor associated with real rigidity in  the goods market  is the existence of  imperfect  competition.  Imperfect comp

Mba programme, write a note on marris growth maximising model?

write a note on marris growth maximising model?

Calculate the marginal costs and output ranges, Assume that input prices ar...

Assume that input prices are constant at r = 1, w = 1, with technology which consists of 5 processes having the following properties: Process Inputs Capital (machine hours)

Help w/ Question, You have opened your own word processing service. You hav...

You have opened your own word processing service. You have already bought a special computer needed for word processing and paid $5,000 for it. However, due to the cost changes in

Illustrate about forecasting in management, Illustrate about forecasting in...

Illustrate about forecasting in management A forecast expert has been asked to provide quarterly estimates of the sales volume for a specific product for the next four quarters

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd