Question

In a Balanced Budget, which of the following conditions holds?

Options

• \[\text{Government receipts} = \text{Government expenditure}\]

• \[\text{Government receipts} > \text{Government expenditure}\]

• \[\text{Government receipts} < \text{Government expenditure}\]

• \[\text{Government expenditure} = \text{Government borrowings}\]

Answer 1

A Balanced Budget is one in which government receipts are exactly equal to government expenditure. When receipts exceed expenditure, it is a Surplus Budget, and when receipts fall short of expenditure, it is a Deficit Budget.