Quick Definition

A budget deficit occurs when a government spends more money than it receives in revenue over a specific period, typically a fiscal year.

Examples

• 1A government spends $500 billion on public services and infrastructure but only collects $450 billion in taxes, resulting in a $50 billion deficit.
• 2During economic downturns, governments may run larger deficits to stimulate growth by increasing spending on job creation programs.
• 3A country increasing its military spending without raising taxes or cutting other expenditures, leading to a budget deficit.

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