ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What is a Balanced Budget? A balanced budget is a budget (i.e., a financial plan) in which revenues are equal to expenditures, such that there is no budget deficit or surplus.

Detailed explanation-2: -A balanced budget (particularly that of a family) refers to a budget in which income is equal to its expenditures. Thus, neither a budget deficit nor a budget surplus exists (it accounts “balance").

Detailed explanation-3: -Fiscal balance, sometimes also referred to as the government budget balance, is calculated as the difference between a government’s revenues (taxes and proceeds from asset sales) and its expenditures. It is often expressed as a ratio of Gross Domestic Product (GDP).

Detailed explanation-4: -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.