ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A balanced budget occurs when revenues are equal to or greater than total expenses. A budget can be considered balanced after a full year of revenues and expenses have been incurred and recorded. Proponents of a balanced budget argue that budget deficits burden future generations with debt.

Detailed explanation-2: -To balance the federal budget, government revenue must meet or exceed government spending. That’s happened only twice in the past half-century: President Lyndon Johnson did it in 1969, and President Bill Clinton from 1998 to 2001. These days, the federal budget is far from balanced.

Detailed explanation-3: -Some economists say a balanced budget is necessary because it helps protect future generations and helps keep interest rates low. It also keeps the economy growing. Opponents, though, say reducing the deficit would raise taxes.

Detailed explanation-4: -A federal budget deficit occurs when government spending outpaces revenue or the income drawn from taxes, fees, and investments.

Detailed explanation-5: -A budget deficit occurs when spending exceeds income. The term applies to governments, although individuals, companies, and other organizations can run deficits. A deficit must be paid. If it isn’t, then it creates debt.