Economics- Budget Outcomes

The federal budget outcome can be the result of two components – the cyclical component of the budget, which refers to the changes to government revenue and expenditure brought about by changes in the level of economic activity. And the structural component of the budget, that is, the deliberate revenue and expenditure changes initiated by the government (the structural component reveals the governments fiscal policy stance).
The largest focus is upon the fiscal or budget outcome. There are three possible budget outcomes, they are:
· A Balanced Budget: Planned Economic Revenue = Planned Government Expenditure
· A Surplus Budget: Planned Economic Revenue > Planned Government Expenditure
· A Deficit Budget: Planned Economic Revenue < Planned Government Expenditure
The government’s stance on fiscal policy is strong factor in budget outcomes. There are three possible stances:
· An Expansionary Fiscal Policy Stance: the aim is to create a smaller defi...