If a country's revenue increases but its national debt remains unchanged, what effect does this have on its budget deficit?

When a country's revenue increases, it means the government is bringing in more money, often from taxes or other sources. If its national debt stays the same, this situation can lead to a smaller budget deficit or even a budget surplus. A budget deficit occurs when a government spends more money than it earns, so if revenue goes up while spending remains constant, the gap between income and expenses shrinks. For example, if a country earns $100 million and spends $120 million, it has a $20 million deficit. But if its revenue increases to $120 million and spending stays at $120 million, the deficit disappears, and the country can even start saving money.