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Government Budget and Economy — Economics STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEconomicsGovernment Budget and Economy3 Marks
Question
Explain the allocation function of a government budget.
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Answer

Govt. uses budgetary policy to allocate resources. This is done by imposing higher rate of taxation on goods whose production is to be discouraged and subsidies provided on goods whose production is to be promoted.

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