Final answer:
A decrease in tax revenue would most likely move a balanced government budget to a deficit in the short run. Option (B) is correct.
Step-by-step explanation:
In the short run, a decrease in Tax revenue would most likely move a balanced government budget to a deficit. Tax revenue is an important source of income for the government and a decrease in tax revenue would result in less money available to cover government expenditures, leading to a budget deficit.
A budget deficit occurs when government expenditures exceed revenues from taxes and other sources. Although the concept of a budget deficit applies to any organization with operating revenues and expenses, the term is most commonly applied to government budgets.
A deficit occurs when the federal government's spending exceeds its revenues. The federal government has spent $381 billion more than it has collected in fiscal year (FY) 2024, resulting in a national deficit.
Primary deficit is known as the difference between the current year's fiscal deficit and the interest payment on the earlier borrowings. It registers the borrowing requirements of the government, excluding interest.