Question

Distinguish between balanced and unbalanced budget.

Answer 1

Aspect	Balanced budget	Unbalanced budget
Definition	A budget where total government revenue is equal to total government expenditure in a given financial year.	A budget where total government revenue is not equal to total government expenditure. It can be either a deficit or surplus budget.
Mathematical representation	Revenue = Expenditure	Revenue ≠ Expenditure
Types	Only one type, as revenue and expenditure are balanced.	Two types: Deficit Budget (Expenditure > Revenue) and Surplus Budget (Revenue > Expenditure).
Suitability	Suitable for stable economies with steady growth.	Suitable for economies in recession (deficit budget) or during economic boom (surplus budget).