ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The government brings in more revenue than it spends for a given year
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The government spends more money than it brings in for a fiscal year
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Either A or B
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None of the above
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Detailed explanation-1: -A federal budget deficit occurs when government spending outpaces revenue or the income drawn from taxes, fees, and investments.
Detailed explanation-2: -When a government’s expenditures on goods, services, or transfer payments exceed their tax revenue, the government has run a budget deficit. Governments borrow money to pay for budget deficits, and whenever a government borrows money, this adds to its national debt.
Detailed explanation-3: -A budget deficit occurs when a government spends more in a given year than it collects in revenues, such as taxes. As a simple example, if a government takes in $10 billion in revenue in a particular year, and its expenditures for the same year are $12 billion, it is running a deficit of $2 billion.
Detailed explanation-4: -Fiscal Deficit and Budget Deficit The higher the amount the Fiscal Deficit, the higher will be the borrowed amount. Thus, the Budgetary deficit is the only difference between all the receipts and all the expenses in both terms, that is revenue and capital account of the government.