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

Fezzes is perfectly competitive, The  fez is the typical Arabic hat in the ...

The  fez is the typical Arabic hat in the shape of a short red cylinder. Historians believe it was manufactured in the city of Fes, in Morocco, during the 17 th century. It has be

Homework, 1. What does a MNC have to consider that a domestic company does ...

1. What does a MNC have to consider that a domestic company does not, and how does this impact capital budgeting? in addition to the complications encountered in doing a capital bu

What is the role of managerial economics in organizations, A. Write a detai...

A. Write a detailed essay on the importance of economics to managers. OR  What is the role of managerial economics in organizations ? B. What are the methods of measuring nation

Factors affecting long run trend of terms of trade, Factors affecting the l...

Factors affecting the long run trend of the Terms of Trade for developing countries Most Third World countries have been faced by a fall in their terms of trade over the long

Per capita income to compare standard of living, PROBLEMS OF USING PER CAPI...

PROBLEMS OF USING PER CAPITA INCOME TO COMPARE STANDARD OF LIVING OVER TIME 1)       The composition of output may change. e.g. more defence-related goods may be produced and

Eco, distinguish between industry demand and firm company demand

distinguish between industry demand and firm company demand

Disadvantages of mixed economy, Disadvantages of Mixed Economy Large m...

Disadvantages of Mixed Economy Large monopolies can still exist in the private sector, and so competition does not really take place There is likely to be a lot of bureaucr

Measures to control inflation, Measures to control inflation An inflat...

Measures to control inflation An inflationary situation can effectively be addressed/tackled if the cause is first and foremost identified.   Governments have basically three

Economic theory, How does economic theory contribute to managerial decision...

How does economic theory contribute to managerial decisions?

Importance of cross elasticity, Importance of Cross Elasticity Knowled...

Importance of Cross Elasticity Knowledge of cross elasticity is necessary when the government wants to impose a tariff on an imported commodity to protect a domestic industry.

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