Budget surpluses
Definition
Budget surpluses occur when a government's revenues exceed its expenditures in a given period. In other words, it means that the government is taking in more money than it is spending.
Analogy
Imagine you have been saving up your allowance for months without spending any of it. You now have a surplus of money because you have more than what you need to cover your expenses.
Related terms
Fiscal policy: The use of government spending and taxation to influence the economy.
Balanced budget: When a government's revenues equal its expenditures, resulting in no deficit or surplus.
Crowding out effect: A situation where increased government borrowing leads to higher interest rates and reduces private investment.
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