Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: Governments deliberately adopt a surplus budget as a necessary tool to stimulate economic growth and increase demand during periods of economic slowdown. Reason R: A deficit budget occurs when government expenditure exceeds revenue, and it is often used as a tool to stimulate economic growth, particularly in developing economies. In the light of the above statements, choose the correct answer from the options given below:

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Economics · Fiscal Policy and Budgeting

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Correct answer

A is not correct but R is correct

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Answer 1

Both A and R are correct and R is the correct explanation of A

Answer 2

Both A and R are correct but R is NOT the correct explanation of A

Answer 3

A is correct but R is not correct

Answer 4

A is not correct but R is correct

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