An excess of tax revenue over government spending is referred to as what?

• A. Budget Deficit
• B. Budget Surplus
• C. Trade Deficit
• D. Revenue Shortfall

Answer: (B)

This question tests understanding of the budget balance. When tax revenue collected by the government exceeds its spending in a period, the result is a budget surplus. It means the government brings in more money than it spends, leaving extra funds that can be used to reduce debt or saved for future needs. The opposite situation—spending more than revenue—is a deficit. The other terms don’t fit this scenario: a budget deficit describes spending overruns relative to revenue, a trade deficit refers to imports versus exports with other countries, and a revenue shortfall implies revenue falls short of expectations. So the correct concept is a budget surplus.