Nominal GDP : Real GDP :: Budget Surplus : ?

Nominal GDP is the total value of all goods and services produced in a country, measured using current prices, while Real GDP adjusts this figure for inflation to show the true growth of the economy over time. Similarly, a budget surplus occurs when a government’s revenue exceeds its spending, while a budget deficit happens when spending exceeds revenue. Just as Real GDP provides a clearer picture of economic health than Nominal GDP, a budget surplus gives a positive indication of a government's financial situation compared to a budget deficit, which signals financial trouble. For example, if a government collects $10 million in taxes but spends only $8 million, it has a budget surplus of $2 million. In contrast, if it spends $12 million, it faces a budget deficit of $2 million, showing a need for better financial management.