Types of budgets, Managerial Economics

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.

Posted Date: 11/30/2012 3:02:50 AM | Location : United States







Related Discussions:- Types of budgets, Assignment Help, Ask Question on Types of budgets, Get Answer, Expert's Help, Types of budgets Discussions

Write discussion on Types of budgets
Your posts are moderated
Related Questions
Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2.

Usually, elasticity of a demand curve throughout its length isn't the same (Fig. below). It varies between 0 and ∞, or in other words, 0 ≤ e p ≥ ∞ In some cases, though, the

Opportunity cost is cost of a different that must be forgone in order to pursue a definite action. Put another way, the advantages you could have received by taking an alternative

Drafting of Price Policy: Demand forecasts assist the management to prepare a few appropriate pricing systems, so that level of price doesn't fall and rise to a great extent at th

Keynes and  Mitchell Description According to Keynes description, a trade cycle is characterised by alternating expansionary and contractionary wavy movements in the aggregate

Bank Rate Bank rate is the rate at which the central bank gives loans to the commercial banks against the security of government and other approved first class securities. In

Limitations of Open Market OperationsLimitations For their success central bank open market operation assume that commercial banks in the country will expand their credit port

Disposable Income This is the income which households actually have available to spend or to save.  To calculate disposal income, which is indicated by Ya, the statistician mu

Joe is evaluating the marketing strategy at his restaurant and inn. Suppose that in response to a $2.00 off sales promotion for spaghetti dinners, Joe finds that nightly dinner sal

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