In 1982, the total expenditure of the government of Kargenia, a European country, exceeded its revenue by a substantial amount. This forced the government of Kargenia to borrow funds to meet its legal obligations. In this scenario, the government of Kargenia incurred a _____ in 1982.
A)revenue deficit
B)budget deficit
C)debt brake
D)revenue backlog

Question

Quizplus · Accepted Answer

A budget deficit occurs when the government's total expenditure exceeds its revenue. This forces the government to borrow funds, as in the case of Kargenia's government in 1982. A revenue deficit refers to a situation where only the revenue side of the budget is in deficit, and a debt brake is a legal mechanism to limit government debt accumulation. Revenue backlog is not a term commonly used in public finance.

In 1982, the Total Expenditure of the Government of Kargenia