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Difficulty: EasyGovernment Budgets and Budgetary Control

Which type of budget is implemented by a government when its proposed total expenditure exceeds its expected total revenue for a given fiscal year?

  1. Deficit budgetAnswer
  2. B
    Surplus budget
  3. C
    Balanced budget
  4. D
    Capital budget

Answer

Deficit budget
A deficit budget is explicitly designed or experienced when planned government spending exceeds total anticipated revenue during a fiscal period.

Step-by-Step Solution

1
Compare government total revenue and total expenditure.
Total expenditure is greater than total revenue.
The financial state of a budget is determined by the relationship between total revenue and total spending.
2
Identify the budget classification where spending exceeds revenue.
Deficit budget
By definition, a deficit budget is a financial plan where total planned expenditure exceeds total expected revenue for the fiscal period.

Key Concept

Deficit Budget Definition
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Topics

Government Budgets and Budgetary Control

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