Meaning of Surplus And Deficit Budget - SS2 Economics Lesson Note

Surplus Budget

A surplus budget is a situation where the revenue or income generated by an individual, organization, or government exceeds the amount of money spent on expenses. There is a positive balance, or surplus, left over after all expenses have been paid. 

A surplus budget is generally considered a positive financial situation because it indicates that an individual, organization, or government is generating more revenue than they are spending on expenses. This surplus can be used to invest in new projects, save for future expenses, or pay off debt.

 

Deficit Budget

A deficit budget is a situation where expenses exceed the revenue or income generated by an individual, organization, or government.

In contrast, a deficit budget is generally considered a negative financial situation because it indicates that an individual, organization, or government is spending more than they are earning or generating in revenue. This can lead to borrowing, accumulating debt, or cutting back on spending to make up for the shortfall.