Meaning of Surplus And Deficit Budget - SS2 Economics Past Questions and Answers - page 1
What is a surplus budget?
A situation where expenses exceed revenue
A situation where revenue exceeds expenses
A situation where revenue and expenses are equal
What can a surplus budget be used for?
To invest in new projects
To accumulate debt
To increase expenses
What is a deficit budget?
A situation where expenses exceed revenue
A situation where revenue exceeds expenses
A situation where revenue and expenses are equal
What can a deficit budget lead to?
Accumulation of debt
Increased revenue
More expenses
Why is a surplus budget generally considered a positive financial situation?
A surplus budget indicates more revenue is being generated than is being spent on expenses, which can be used to invest in new projects, save for future expenses, or pay off debt.
What is the main disadvantage of a deficit budget?
The main disadvantage of a deficit budget is that it can lead to borrowing, accumulating debt, or cutting back on spending to make up for the shortfall.