If government spending exceeds tax collections,

Question

a. there is a budget surplus.
b. there is a budget deficit.
c. private saving is positive.
d. public saving is positive.
e. none of the above is true.

Answer 1

The correct answer is: b. there is a budget deficit.

When government spending exceeds tax collections, it means that the government is spending more money than it is receiving from taxes, resulting in a budget deficit.