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.