5.2.1 Meaning of government budget
Definition: A government budget is the annual financial statement of planned government revenue (mainly taxation) and planned government expenditure for the coming fiscal year. Fiscal policy is the use of government spending and taxation to influence aggregate demand, output, employment and the price level.
Budget balance = government revenue (T) – government expenditure (G). The budget is a flow (one year); national debt is a stock.
Example: India's Union Budget is presented by the Finance Minister every 1 February for the fiscal year April to March.
🔒 Also in the full notes
- 5.2.2 Budget deficit and budget surplus
- 5.2.3 Meaning and significance of the national debt
- 5.2.4 Taxation
- 5.2.5 Government spending
- 5.2.6 Expansionary and contractionary fiscal policy
- 5.2.7 AD/AS analysis of fiscal policy
- Exam practice: 8 practice questions
- 4 exemplar answers with full model answers and mark breakdowns
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