JAMB Economics 2019 Objective — Question 39

Question 39 of 40 from the Joint Admissions and Matriculation Board (JAMB) Economics 2019 Objective paper, with the correct answer and a full explanation.

Deficit budgeting refers to a fiscal situation in which

A. planned expenditure equals expected revenue
B. planned expenditure is less than expected revenue
C. planned expenditure is more than expected revenue from taxCorrect
D. there is no government borrowing

Explanation

Deficit budgeting refers to a fiscal situation in which planned expenditure is more than expected revenue from tax; government then has to finance the budget through borrowing, which can result in huge public debt.

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