Question

Identify the objective of the budget.

Options

• Activities to secure a reallocation of resources

• Redistributive activities

• Stabilizing activities

• All of the above

Answer 1

All of the above

Explanation:

The government of a country directs the allocation of resources through its budgetary policy in such a way that there is a balance between the goals of profit maximization and social welfare. A government uses fiscal instruments such as taxation and subsidies to improve the distribution of income and wealth in the economy. The budget is an important policy tool for combating deflation and inflation.