Question

If the federal government received $1.2 trillion in tax dollars and only spent $1.1 trillion that year, what would occur

Answer 1

If the federal government received $1.2 trillion in tax dollars and only spent $1.1 trillion that year, a b. budget surplus would occur.

What is a budget surplus?

A budget surplus describes a situation when the budgeted revenue exceeds the budgeted expenditure.

The budget surplus implies that the federal government is spending less than it received in revenue.

Some economists have argued that budget surpluses are not good for the economy, as they may cause deflation and stagnate economic growth.

The opposite of a budget surplus is a deficit.  When a budget deficit occurs, government spending exceeds revenues, causing the government to borrow money in order to fund the year's expenditure.

Thus, if the revenue from taxation is $1.2 trillion while the expenditure is $1.1 trillion in a year, a b. budget surplus would occur.

Learn more about budget surpluses at https://brainly.com/question/26010226

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Question Completion with Answer Options:

a. budget deficit

b. budget surplus

c. balance budget