Final answer:
A budget surplus exists when budgeted costs are more than the actual results. This generally indicates a situation where revenue exceeds expenditures or expenses are less than anticipated. For governments, a budget surplus or deficit is the difference between tax revenue and spending within a fiscal year.
Step-by-step explanation:
When budgeted costs exceed actual results, this is referred to as a budget surplus. This situation is achieved when the projected expenses for a given period are higher than the actual expenses or when actual revenue surpasses the anticipated revenue. In governmental terms, this could relate to the annual budgetary process where the difference between collected tax revenue and government spending results in either a budget deficit or budget surplus, depending on whether spending exceeds taxes or vice versa. The fiscal year for government budgets usually starts on October 1 and ends on September 30 of the following year. A surplus indicates fiscal health or conserved resources, whereas a deficit signals the need for additional funding or cuts to spending to balance the budget.
The concept of a budget surplus is particularly relevant during periods of strong economic performance when automatic stabilizers tend to increase tax revenue and decrease the necessity for government spending, resulting in government revenue exceeding its expenditures. Conversely, in times of recession, the actual budget deficit is often higher than the standardized employment budget deficit since the economy is below potential GDP, necessitating increased spending and reduced taxes as a form of economic support.