📚 Learning Guide
Calculating Budget Deficits
easy

Which of the following is NOT considered a source of revenue when calculating budget deficits?

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Learning Path
Learning Path

Question & Answer
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2
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Choose the Best Answer

A

Taxes

B

Government grants

C

Borrowing

D

Public donations

Understanding the Answer

Let's break down why this is correct

Answer

When calculating budget deficits, one important thing to remember is that revenue comes from sources like taxes and fees that the government collects. However, any money that is borrowed is not considered revenue. This is because borrowed money has to be paid back in the future, so it doesn't truly add to the government's income for budgeting purposes. For example, if a government takes a loan to cover its expenses, that loan isn't counted as revenue; instead, it's a way to manage cash flow temporarily. Understanding this distinction helps clarify how budget deficits are calculated and why it's important to rely on actual income rather than borrowed funds.

Detailed Explanation

Public donations are gifts from people. Other options are incorrect because Many think taxes are optional, but they are a main way the government gets money; Some believe grants are free money, but they come from taxes.

Key Concepts

revenue sources
Topic

Calculating Budget Deficits

Difficulty

easy level question

Cognitive Level

understand

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