ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A deficit budget is said to have occurred when expenses exceeds the revenue and it is a symptom of financial health. The government normally uses this term to its spending instead of entities or individuals.

Detailed explanation-2: -A budget deficit occurs when money going out (spending) exceeds money coming in (revenue) during a defined period. In FY 2022, the federal government spent $6.27 trillion and collected $4.90 trillion in revenue, resulting in a deficit.

Detailed explanation-3: -A revenue deficit is when a company’s total revenue is less than its total expenditure. This indicates the company is spending more money than it can generate. The revenue deficit equation is easy to understand: it’s the difference between a company’s income and its expenses.

Detailed explanation-4: -A budget deficit occurs when expenses exceed income (i.e., tax and other borrowed revenue), usually measured over a single financial year. The term tends to be reserved for governments, although it’s also possible for organisations, businesses, and individuals to run budget deficits.

Detailed explanation-5: -When revenues exceed expenses there is a budget surplus; when expenses exceed revenues there is a budget deficit. While neither of these is a technically balanced budget, deficits tend to elicit more concern. The term “budget surplus” is often used in conjunction with a balanced budget.