Budget Surplus
Definition
A budget surplus occurs when government revenues (income) exceed government expenditures (spending), resulting in a positive balance.
Analogy
Think of a budget surplus as having extra money left over after paying all your bills. It's like finding unexpected cash in your pocket that you can save or use for something else.
Related terms
Budget Deficit: A budget deficit occurs when government expenditures exceed government revenues, resulting in a negative balance.
National Debt: The national debt is the total amount of money owed by the government due to accumulated deficits over time.
Fiscal Policy: Fiscal policy refers to the use of government spending and taxation to influence the economy, including managing budget surpluses or deficits.
"Budget Surplus" appears in:
Study guides (2)
Practice Questions (2)
- Which of the following fiscal policy actions would be most effective in reducing a budget surplus?
- What is the difference between a budget deficit and a budget surplus?
Resources
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