Question : A government budget deficit occurs when:
Option 1: Revenues exceed expenditures
Option 2: Expenditures exceed revenues
Option 3: The budget is balanced
Option 4: There are no revenues or expenditures
Answer (1)
19th Jan, 2024
Correct Answer:
Expenditures exceed revenues
Solution : The correct answer is (b) Expenditures exceed revenues.
A budget deficit happens when the government's total expenditures or spending exceed its total revenues or income during a specific period, such as a fiscal year. In other words, the government is spending more money than it is earning from various sources such as taxes, fees, and other revenue streams.
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