Question

What is the purpose of the federal budget?

a. it serves as a plan for gov spending each year
b. it allows the gov to default on its debts
c. it prevents the gov from creating a budget deficit
d. it ensures that the gov will always have a surplus

Answer 1

The purpose of the federal budget is to serve as an annual spending plan for the government. It can result in a deficit, surplus, or be balanced depending on whether expenditures exceed, are less than, or equal revenues. The correct option is (a).

Step-by-step explanation:

The purpose of the federal budget is to outline how the government intends to raise revenue through taxes and other means, and how it plans to spend those funds over a fiscal year. Option (a) is correct: it serves as a plan for government spending each year.

Government spending provides various services and when spending exceeds the revenue, a budget deficit occurs. Conversely, when revenue exceeds spending, there's a budget surplus. A balanced budget occurs when spending and revenue are equal. The 2009 and 2020 federal budgets are examples where significant deficits relative to GDP were recorded, especially during major events such as the Great Recession and the COVID-19 pandemic.

Answer 2

C

Step-by-step explanation:

it prevents the government from creating a budget deficits