Distinguish between Surplus budget and Deficit budget.
|Points||Surplus Budget||Deficit Budget|
|Meaning||A surplus budget takes place when the estimated receipts are more than estimated expenditure.||A deficit takes place when its estimated expenditure is more than estimated receipts.|
|Formula||Surplus Budget = (Estimated Receipts > Estimated Expenditure)||Deficit Budget = (estimated Receipts < Estimated Expenditure)|
|Preference by Countries||A country will prefer surplus budget because the surplus can be used to repay outstanding loans or liabilities.||A country does not prefer deficit budget, as it affects economic growth and development.|
||It leads to a decrease in the liabilities of the government or causes an increase in its savings.||It leads to an increase in the liabilities of the government or causes a reduction in its reserves.|
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Solution Surplus Budget and Deficit Budget. Concept: Types of Budget.