Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose 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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