which of the following is a necessary condition for a budget surplus in an economy course hyero

Is a budget surplus necessary for a healthy economy?

A budget surplus is an indicator of a healthy economy. However, it is not necessary for a government to maintain a surplus. For instance, not having a budget surplus does not mean the economy is not being run efficiently. A surplus implies the government has extra funds; these funds can be allocated to pay debts,...

What causes budget surpluses to occur?

Economic and spending changes generate a surplus. A budget surplus is an indicator of a healthy economy. However, it is not necessary for a government to maintain a surplus. For instance, not having a budget surplus does not mean the economy is not being run efficiently.

What can a city do with a budget surplus?

A budget surplus might be spent to make a purchase, pay off debt or save for the future. A city government that has a surplus may use the money to render improvements to a local decaying park, for example. Key Takeaways. A budget surplus is when income or receipts exceed outlays or expenditures.

What is a budget surplus or deficit?

Budget surplus or deficit data appears in the statements, which summarize whether the government is spending or collecting more money than expected. In addition, the data records future collections or changes to the budget. 3 

When expenditures exceed income, the outcome is a budget deficit.?

When deficits occur, money is borrowed and interest is paid, similar to an individual spending more than they earn and paying interest on a credit card balance. A balanced budget exists when expenditures equal income.

What is budget surplus?

A budget surplus occurs when income exceeds expenditures. The term often refers to a government's financial state, as individuals have "savings" rather than a "budget surplus.". A surplus is an indication that a government's finances are being effectively managed. 1:39.

What is surplus in government?

A surplus implies the government has extra funds. These funds can be allocated toward public debt, which reduces interest rates and helps the economy. A budget surplus can be used to reduce taxes, start new programs or fund existing programs such as Social Security or Medicare.

What happens when a deficit occurs?

When deficits occur, money is borrowed and interest is paid, similar to an individual spending more than they earn and paying interest on a credit card balance. A balanced budget exists when expenditures equal income. During the final years of Bill Clinton's presidency, the U.S. government eliminated a large budget deficit, resulting in a surplus.

Is a surplus a good indicator of a healthy economy?

Economic and spending changes generate a surplus. A budget surplus is one indicator of a healthy economy. However, it is not necessary for a government to maintain a surplus. The U.S. has rarely run a budget surplus, and has experienced long periods of economic growth while running a budget deficit. 2  1