Question : What is a budget surplus?
Option 1: When the government takes in more than it spends
Option 2: When the government spends more than it takes in
Option 3: When the government has no debt
Option 4: When the government has a deficit
Correct Answer: When the government takes in more than it spends
Solution : The correct answer is (a) When the government takes in more than it spends
A budget surplus occurs when the government takes in more money than it spends. It means that the government's total revenue or income exceeds its total expenditures in a given period, usually a fiscal year.
A budget surplus can result from various factors, such as increased tax revenue, reduced government spending, or favorable economic conditions. It indicates that the government has a surplus of funds available beyond its immediate expenses.
When a government has a budget surplus, it can use the excess funds for various purposes. These may include paying down existing debt, investing in infrastructure projects, saving for future needs, or implementing tax cuts.
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