When a Government Spends More Than It Earns in Revenue

question 150

Multiple Choice

When a government spends more than it earns in revenue, we say that it has a:

• A)budget surplus.
• B)budget deficit.
• C)budget crisis.
• D)federal debt.

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Definitions:

Gross Earnings

The total income earned by an individual or business before any deductions or taxes.

Federal Income Taxes

Taxes imposed by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Net Pay

The amount of money an employee receives after deductions such as taxes and retirement contributions are subtracted from their gross salary.

Payroll

The total amount of wages, salaries, and other compensation that a company owes to its employees for a set period.