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

Significance of the behavioural approach, The significance of behavioural a...

The significance of behavioural approach is difficult to assess. It provides useful insights into some aspects of business behaviour. March and Cyert have claimed considerable shor

Factors influencing supply curve, Factors influencing Supply Curve St...

Factors influencing Supply Curve State of technology     There is a direct relationship between supply and technology.  Improved technology results in more supply as with

Price elasticity and marginal revenue, The most significant uses of the pri...

The most significant uses of the price elasticity of demand, used specifically in business decision-making. It refer to the relationship between price elasticity and the marginal c

Perfectly elastic supply, Perfectly Elastic Supply Supply is said to b...

Perfectly Elastic Supply Supply is said to be perfectly or infinitely elastic if the price is fixed at all levels of demand.  The demand curve has been shown in the above diag

Costs of economic growth, Costs of Economic Growth (Increase in National In...

Costs of Economic Growth (Increase in National Income) 1.     People living in industrial towns suffer from the effects of a polluted atmosphere. 2.     The manufacture of

Show the changes in fixed costs and profit maximisation, Q. Show the Change...

Q. Show the Changes in fixed costs and profit maximisation? A firm maximises profit by operating where marginal revenue equals marginal costs. A change in fixed costs hasn't an

Function and importance, explain the supply function and importance of supp...

explain the supply function and importance of supply analysis in brief

Waste in imperfect competition, WASTE IN IMPERFECT COMPETITION Monopol...

WASTE IN IMPERFECT COMPETITION Monopolistic competition involves some degree of waste in two aspects. When new firms enter the industry and the demand for the individual fi

What is demand theory, What is Demand theory: Demand theory relates to ...

What is Demand theory: Demand theory relates to the study of consumer behaviour. It addresses questions like what incites a consumer to buy a particular product, why do consume

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