Multiple choice

When government expenditure exceeds total government receipts, the budget deficit is:

  1. positive

  2. negative

  3. zero

  4. indeterminate
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A budget deficit occurs when government expenditure exceeds receipts. In economic terminology, when expenditure > receipts, the deficit is recorded as a positive value (the size of the deficit). For example, if receipts are 100 and expenditure is 120, the deficit is 20 (positive), not negative. The deficit represents how much the government must borrow.

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