WAEC Economics 2019 Objective — Question 40

Question 40 of 50 from the West African Examinations Council (WAEC) Economics 2019 Objective paper, with the correct answer and a full explanation.

In a period of unemployment and falling prices, governments should adopt a

A. zero-based budget
B. budget deficitCorrect
C. balanced budget
D. surplus budget

Explanation

Unemployment and falling prices indicate deflation. To revive the economy, government must pump more money in by spending more than it earns — i.e. running a deficit budget.

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