ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -The correct option is B. Deficit budget. When the government incurs more public expenditure for governmental projects then its expenditure exceeds its revenue, and this is called deficit budget.

Detailed explanation-3: -Introduction to Revenue Deficit When the government’s total revenue expenditure exceeds its total revenue receipts, that means the net income is less than the net expenditure, revenue deficit occurs.

Detailed explanation-4: -Fiscal Deficit occurs when the government spends more than it earns or beyond its resources. Revenue Deficit occurs in an economy when the realised income is less than the projected/expected income.

Detailed explanation-5: -The fiscal deficit is the difference between the total revenue and total expenditure of the government. Revenue deficit hence arises when the government’s actual net receipts is lower than the projected receipts. So, the size of fiscal deficit is always higher than revenue deficit.