Question

Choose the correct option.

Statement I: A country is said to have a surplus budget if its total expenditure is more than its total revenue.

Statement II: A country is said to have a balanced budget if its total expenditure is less than its total revenue.

• A. Both of the statements are correct.
• B. Both of the statements are incorrect.
• C. Statement I is correct, but Statement II is incorrect.
• D. Statement I is incorrect, but Statement II is correct.

Answer 1

The correct option is B Both of the statements are incorrect.

There are three types of budget:

1. When expenditures are equal to receipts, it is called a balanced budget.
2. When expenditures are lesser than receipts, it is called a surplus budget.
3. When expenditures are greater than receipts, it is called a deficit budget.