Page 101 - Macroeconomics. book docx_Neat

in G because they do not represent production.

4. Meaning of Government Budget

A government budget is a financial plan that shows the expected revenues and

expenditures of the government during a specific period, usually one year. It reflects
government priorities and economic policies.

5. Components of Government Budget

The government budget consists of:

- Government Revenues: mainly taxes (income tax, sales tax, customs duties) and non-

tax revenues.

- Government Expenditures: spending on public services, wages, infrastructure,
education, health, and defense.

6. Types of Government Budget Balance

a. Balanced Budget:

Occurs when government revenues equal government expenditures.

Revenue = Expenditure

b. Budget Deficit:

Occurs when government expenditures exceed revenues.

Deficit = Expenditure − Revenue

c. Budget Surplus:

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