Question

A budget surplus, when a nation spends less than it takes in from taxes, is the opposite of a(n) ________?

1) Budget deficit
2) Budget balance
3) Budget surplus
4) Budget shortfall

Answer 1

A budget deficit occurs when a nation spends more money than it takes in from taxes. This is the opposite of a budget surplus, which occurs when a nation takes in more money from taxes than it spends. so, the correct answer is 1) Budget deficit.

Step-by-step explanation:

A budget balance occurs when a nation takes in the same amount of money from taxes that it spends. This is a rare occurrence, but it does happen from time to time.

A budget shortfall is a term that is sometimes used to refer to a budget deficit. However, it can also refer to a situation in which a nation's revenues are not enough to cover its expenses, even if the nation is not taking in less money than it is spending.

So, the correct answer is 1) Budget deficit.

Answer 2

A budget surplus, characterized by a nation spending less than it collects from taxes, stands as the opposite of a budget deficit. Thus, the correct answer is option 1.

Step-by-step explanation:

A budget surplus occurs when a government's revenue from taxes exceeds its expenditures, resulting in leftover funds. Conversely, a budget deficit occurs when a government spends more than it collects in revenue, necessitating borrowing or other means to cover the shortfall (option 1). This deficit represents an imbalance between a nation's income and spending, potentially leading to increased debt. The surplus, on the other hand, signifies a positive balance, allowing for the potential reduction of debt or allocation of funds toward other areas such as infrastructure, social programs, or savings.

Understanding the concepts of surplus and deficit is crucial in fiscal policy analysis. A surplus may offer opportunities for economic growth, debt reduction, or investment in public services, whereas a deficit could require strategies like borrowing or tax increases to cover the shortfall. Governments often strive to maintain a balanced budget or a surplus to ensure financial stability and sustainable economic growth. Therefore, recognizing the distinction between a surplus and a deficit aids in evaluating a nation's financial health and its capacity to manage its fiscal responsibilities.