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Business, 17.04.2021 17:50, ARAYAMYHAND
Budget philosophies There are several important philosophies regarding budget balances. One way in which they differ is in terms of the time span over which the budget should be balanced. Another difference among budget philosophies involves whether the budget balance is as important as other economic goals. Which of the following budget philosophies advocates keeping the budget in balance every year, except during wartime?
Functional finance
Annually balanced budget
Cyclically balanced budget
A major problem with the implementation of this philosophy is that it:
Magnifies business cycle fluctuations
Can allow the national debt to burgeon with chronic deficits
Relies upon government officials to budget for surpluses during boom times in order to cover deficits during recessions
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