A government budget is in surplus when:
Correct answer: A. Revenue exceeds expenditure during the budget period
- A. Revenue exceeds expenditure during the budget period
- B. Expenditure exceeds revenue during the budget period
- C. Public debt equals annual tax revenue
- D. Capital receipts equal current expenditure
Explanation
A budget surplus occurs when government receipts are greater than government expenditure over the relevant period. When expenditure exceeds revenue, the budget is in deficit rather than surplus.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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