Question:medium

Steps taken through the government budget can influence

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The budget's allocation, distribution and stabilisation functions cover resources, inequality and inflation together.
Updated On: Sep 23, 2026
  • Inequalities
  • Allocation of resources
  • Inflation
  • All of these
Show Solution

The Correct Option is D

Solution and Explanation

Step 1: Recall the three budgetary objectives (Musgrave):
Allocation function, distribution function, and stabilisation function.

Step 2: Map each option to an objective:
"Allocation of resources" is literally the allocation function; "Inequalities" is addressed by the distribution function (progressive taxation, subsidies to the poor); "Inflation" is addressed by the stabilisation function (adjusting total budgetary spending/taxation to manage demand).

Step 3: Since all three map to real budget objectives:
None can be excluded, so the comprehensive option is correct.

Final Answer:
Option D, all of these.
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