KK11 - The Budget Outcome

Question 1

The Budget Outcome

Answer 1

Refers to the difference between predicted government revenue and expenditure

Question 2

Budget Balance

Answer 2

The annual expected value for receipts is equal to the value of outlays

Question 3

Budget Deficit

Answer 3

-The annual value of expected receipts less than expected value of outlays
-Financed by overseas borrowing

Question 3

Budget Surplus

Answer 3

-The annual expected value of receipts is more than the value of outlays
-Used to pay back public debt

Question 4

Objective of each Budget outcome

Answer 4

-Surplus = more revenue = less economic activity as government is pulling money out of the economy
-Deficit = more expenditure = more economic activity as the government is putting money into the economy