Government budgets: surplus or deficit

Rule and key idea

Compare money coming in (revenue) with money going out (spending). A deficit must be covered by borrowing or savings.

revenue − spending > 0 → surplus · < 0 → deficit

Worked examples

Try two questions

1. A town expects revenue of $196 million and plans to spend $53 million this year. What is the result?

   1. a deficit of $249 million
   2. a surplus of $249 million
   3. a deficit of $143 million
   4. a surplus of $143 million

2. A town expects revenue of $47 million and plans to spend $164 million this year. What is the result?

   1. a surplus of $117 million
   2. a deficit of $117 million
   3. a deficit of $211 million
   4. a surplus of $211 million

Answers and reasoning