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CUET Economics 2025 PYQs13 May Shift 1. Free, no login required.

Macro

past year questions, CUET Economics 2025 13 May Shift 1

Government Budget

past year questions, Macro, CUET Economics 2025 13 May Shift 1

Medium

When governments intervene in the market to expand or reduce the demand, this course of action is .......

Solution

✅ Correct Option: 3

Option 1 -> Allocative Function: Relates to efficient allocation of resources and addressing market failures.

Option 2 -> Distribution Function: Concerns redistribution of income and wealth to achieve equity in society.

Option 3 -> Stabilization Function: Involves government intervention to manage aggregate demand and maintain economic stability.

Option 4 -> Fiscal Function: Broader term encompassing overall government revenue and expenditure activities.

Hence, Stabilization Function -> The stabilization function is one of the three main functions of government in public finance (along with allocation and distribution). When governments intervene to expand demand during recessions (through increased spending or tax cuts) or reduce demand during inflation (through decreased spending or tax increases), they are performing the stabilization function. This function aims to maintain economic stability by controlling inflation, reducing unemployment, and promoting sustainable economic growth through demand management policies. -> correct

Related questions:

2025: 14 May Shift 1

In order to arrive Gross Primary Deficit what should be deducted from Gross Fiscal deficit?

  1. Borrowing from abroad
  2. Net factor income from abroad
  3. Net Interest liabilities.
  4. Transfers payments

2023: 29 May Shift 2

Which one is not the objective of government budget?

2025: 3 June Shift 1

In the Annual Budget 2025, the Government of India set up disinvestment targets of ₹80000 crore. Such proceeds from disinvestment can be classified as ________ receipts in the government budget as it leads to ________ of the government.

2022: 19 July Shift 2

Match List - I with List - II.

List - I (Transactions)List - II (Heads)
(A) Loans extended by the Indian Government to the Sri Lankan Government(I) Revenue Receipts
(B) Expenditure by the Government on Covid Vaccines(II) Capital Receipts
(C) Dividend received by the Government on shares bought by it(III) Capital Expenditure
(D) Public Provident Fund held by Public(IV) Revenue Expenditure

Choose the correct answer from the options given below :

2025: 29 May Shift 2

When goods are financed through the budget and can be used without any direct payment, they are known as.......

2025: 13 May Shift 2

From the following, identify the main features of Fiscal responsibility and Budget Management act.

(A) The actual deficits may exceed the targets specified only on grounds of national security or natural calamity or such other exceptional grounds as the central government may specify.

(B) The Act mandates the central government to take appropriate measures to reduce fiscal deficit to not more than 3 percent of GDP

(C) The central government shall not borrow from the Reserve Bank of India except under specified conditions.

(D) Measures to be taken to ensure greater transparency in fiscal operations.

Choose the correct answer from the options given below:

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