When tax revenue is higher than government expenditures, the government incurs a:
A) budget deficit.
B) positive capital ratio.
C) budget surplus.
D) national debt.

Question

Quizplus · Accepted Answer

A budget surplus occurs when the government collects more in tax revenue than it spends on government expenditures, resulting in extra funds that can be used to pay off debt or saved for future use. A budget deficit, on the other hand, is the opposite situation where government expenditures exceed tax revenue, resulting in the need to borrow funds and potentially increase the national debt. A positive capital ratio and national debt are not directly related to the situation described.

When Tax Revenue Is Higher Than Government Expenditures, the Government