Answer:
Government budget: A government budget is an annual financial statement of estimated revenue and estimated expenditure during a financial year. Government budget is a statement of its income and expenditure. Through budgetary policy, government aims to allocate resources in accordance with economic (profit maximisation) and social (public welfare) priorities of the country. To encourage investments, government can give tax concessions, subsidies, etc to the producers. For example: government discourages the production of harmful consumption goods like liquor or cigarettes, etc. through levying heavy taxes and encourages the use and production of "khaadi" products by providing subsidies. Government budget can be used to bring price stability or economic stability in the economy: Government can bring price/economic stability i.e.., control fluctuations in the general price level through taxes, subsidies and expenditure. For instance, when there is inflation (continuous rise in price), government can reduce its own expenditure. When there is depression, government can reduce taxes and grant subsidies to encourage spending by the people.
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