OMTEX CLASSES: A deficit budget may prove useful during the period of depression.

A deficit budget may prove useful during the period of depression.


During Deficit, Economics activities are at a low level. it results in unemployment, business loss and even bankruptcy and inflation etc. the government can borrow money and increase the expenditure on public works through deficit financing. This will increase employment and total effective demand for the goods and also the services which would then encourage investment. thus, a deficit budget is useful for removing depression and unemployment.