A scenario in which the government's spending surpasses its revenue is known as _________________.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Budget Deficit.
- A budget deficit occurs when expenditure surpasses income. While commonly associated with governments, deficits can also occur for individuals, companies, and organizations.
- This shortfall serves as an indicator of the economic financial condition.
- To mitigate the deficit, the government may implement measures such as reducing certain expenses and enhancing revenue-generating initiatives.