Assertion (A): A surplus budget can help to control inflation.
Reason (R): In a surplus budget the government takes more out of the economy in taxes than it puts back as spending.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Net withdrawal of spending lowers AD. R explains A.

Concept: Surplus budgets and inflation
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsBalanced, surplus and deficit budgets

Practise this chapter →

Ten questions from Government Budget: Receipts & Expenditure, at your own pace.

Practise this chapter →

Ten questions from Government Budget: Receipts & Expenditure, at your own pace.

Practise this chapter All 57 questions in Government Budget: Receipts & Expenditure Revise the notes for Government Budget: Receipts & Expenditure

Assertion (A): A surplus budget can help to control inflation.Reason (R): In a surplus budget the government takes more out of the economy in taxes than it puts back as spending.

Explanation

Assertion (A): A surplus budget can help to control inflation.
Reason (R): In a surplus budget the government takes more out of the economy in taxes than it puts back as spending.