What is an example of a budget deficit?

Examples of budget deficits include state government budget deficits, where a state’s expenditures exceed its revenues, and corporate budget deficits, where a company spends more money than it generates due to various factors such as decreased demand for its products. What advantages can running a budget deficit offer?

What causes a budget deficit?

A budget deficit occurs when expenses exceed revenue. Certain unanticipated events and policies may cause budget deficits. Countries can counter budget deficits by raising taxes or cutting spending. When a budget deficit is identified, current expenses exceed the income received through standard operations.

What happens if a government runs a budget deficit?

Whenever a government runs a budget deficit, it adds to its long-term debt. For example, suppose the government of Kashyyyk has a $ 200 million budget deficit one year, so it borrows money to pay for its budget deficit. The next year the government runs another deficit, this time of $ 100 million.