Answer 1

There are three types of a government budget. These are as follows.

• Balanced budget: A balanced budget refers to the budget when the total budget expenditure is equal to the total budget receipts. That is,
  Balanced budget = Total budget revenue – Total budget expenditure = 0
• Surplus budget: Surplus budget refers to the excess of government revenue over the expenditure. In other words, when the government revenue is greater than its expenditure, it is called a surplus budget. That is,
  Surplus budget = Government revenue – Government expenditure
• Deficit budget: Deficit budget refers to the excess of the total budgeted expenditure over the total budgeted receipts. In other words, budget deficit implies a situation where the total budget receipts of the government fall short of the total budget expenditure of the government. That is, Deficit budget = Government expenditure > Government revenue