Meaning of Balanced Budget - SS2 Economics Past Questions and Answers - page 1
What does a balanced budget mean?
Spending more than the income
Spending only as much as earned
Spending less than the income
When is a government said to have a balanced budget?
When the expenses exceed the revenue generated
When the revenue generated is equal to the expenses
When the revenue generated is less than the expenses
Why is a balanced budget considered a positive financial situation?
It helps to ensure financial stability and sustainability
It encourages the accumulation of debt
It results in a negative balance
(A balanced budget is considered a positive financial situation because it helps to ensure financial stability and sustainability. This implies that the exact revenue derived is allocated to spend on a similar amount of expenses, ensuring that there is no instability in terms of income, price and employment of labour and resources)
Write a simple definition of a balanced budget in one sentence.
A balanced budget is a situation where expenses are equal to or less than the income or revenue generated within a specific period.