Q1. When the government spends an amount equal to the revenue that it collects, it is known as a:
A Deficit Budget
B Surplus Budget
C Balanced Budget Correct
D Equal Budget
Explanation
A balanced budget is one in which the government's expenditure is equal to its revenue. That is exactly the situation described in the question. A deficit budget occurs when expenditure exceeds revenue, so it does not match equality. A surplus budget occurs when revenue is greater than expenditure. "Equal Budget" may sound close to the wording, but it is not the accepted economic term. The standard classification uses balanced, deficit, and surplus budgets, and equality between receipts and spending is called a balanced budget.