Question

A balanced budget means that ______.

Options

• Government spending is greater than tax revenue

• Tax revenue is greater than government spending

• The change in government spending equals the change in taxes

• There is no government spending

Answer 1

A balanced budget means that the change in government spending equals the change in taxes.

Explanation:

A balanced budget occurs when the increase in government expenditure (ΔG) is exactly matched by an equal increase in taxes (ΔT), so the fiscal deficit remains unchanged.