How can a surplus budget be used during inflation?

● A surplus budget is a budget that exists when the government receipt is more than the government expenditure.

● It is usually recommended during inflation in the economy.

● It implies that the government is taking more money out of the economic system as compared to the money that it is putting in the economic system.

● Aggregate demand Falls which reduces the price level. Thus the inflation is controlled.

● The surplus budget must be avoided in the situation of deflation and recession.