ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Budget is surplus if the estimated government receipt[4] s is more than the estimated government expenditure. Budget is a deficit when the estimated government receipts are less than the estimated government expenditure.

Detailed explanation-2: -A budget surplus is when income or revenue exceeds expenditures. Governments and companies with surpluses have additional money that can be reinvested or used to pay off debts. The opposite of a surplus is a deficit, which occurs when spending exceeds revenues.

Detailed explanation-3: -Budget deficits occur when expenses exceed revenue and for a nation, they can lead to economic instability, such as inflation. Using fiscal policy to promote economic growth to increase tax revenue and decrease spending can decrease a deficit.

Detailed explanation-4: -For example, If a restaurant made a monthly revenue of $20, 000 and its expenses only equaled out to $17, 000, it has a surplus of $3, 000.

Detailed explanation-5: -A country will prefer surplus budget because the surplus can be used to repay outstanding loans or liabilities. A country does not prefer deficit budget, as it affects economic growth and development.