Explain the ‘allocation of resources’ objective of Government budget.

Question 4. Explain the ‘allocation of resources’ objective of Government budget.
Class  Class 12
Subject Economics (Macroeconomics)
Category Class 12 Economics Solutions Sandeep Garg

Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Short Questions Q.4 Explain the ‘allocation of resources’ objective of Government budget.
“OR”
Elaborate the objective of ‘reallocation of resources in the government budget.
“OR”
Explain how government can influence allocation of resources through government budget.
“OR”
Through its budgetary policy, government allocates resources in accordance with the requirements of the country.” Do you agree with the give statement? Justify your answer with valid reason.




Solution:-

Government through its budgetary policy relocates resources to maintain the balance between its objectives of profit maximisation and social welfare. To achieve profit maximisation and encourage investment, government invites private players by providing tax holidays, subsidies etc. but sometime private players hesitate to take up projects requiring heavy investment and having long gestation periods such as sanitation, building of roads etc. In such a situation government takes up these projects for social welfare.

Short Questions – Sandeep Garg Macroeconomics Class 12 Solutions Government budget and the Economy

Sandeep Garg Macroeconomics Class 12 Solutions

Part A: Introductory Macroeconomics
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