Chapter 28, Problem 10P

To determine

Concept Introduction:

Balanced Budget: When the revenue of a government from all the sources is equal to the expenditure of the government that is when there is neither budget surplus nor budget deficit then the budget of government is said to be a balanced budget.

Business cycle: Over a period of time, any country would face fluctuations in its economic activities. These fluctuations or upswings and downswings are called business cycles. These upswings and downswings are called expansion and recession respectively. At expansion phase, the economy tends to grow in the real terms, whereas in recession, the economy tends to contract.