Distinguish between Deficit budget and balanced budget.
Answers
A budget deficit occurs when expenses exceed revenue, and it is an indicator of financial health. The government generally uses this term in reference to its spending rather than business or individuals. Accrued government deficits form the national debt.
A balanced budget a budget in which revenues are equal to expenditures.
Explanation:
Budget deficit - A budget deficit occurs when, over a specific period of time, an individual, business or government spends more than the revenue available to pay for the expenditure. Debt is the total value of accumulated deficits over time. A budget deficit increases the level of government debt. Large deficits also lead to an increase in national debt as a percentage of GDP.
Balanced budget - A balanced budget especially a government budget is a budget in which income is equal to expenditure. Therefore, there is neither a budget deficit nor a budget surplus but the balance accounts. It is a budget that does not have a budget deficit, but may have a budget surplus.