If Receipts are higher than Expenditure, the Budget is known to be _________.

surplus

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deficit

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balanced

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any of these

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Solution

The correct option is A surplus
A budget surplus occurs when tax revenue is greater than government spending. With a budget surplus, the government can use the revenue to pay off public sector debt. Budget surpluses are quite rare in modern economies because of the temptation for politicians to spend more money and cut taxes.

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Total expenditure of a government budget is Rs 75,000 crore and total receipts are Rs 45,000 crore. How much is the budget deficit?

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