Budget surplus occurs when a budget’s revenues exceed its expenditure. In terms of a government’s budget, it means that the income through taxes, seignior-age, selling of government property is greater than the government’s expenditures through government purchases and transfers. It is also a feature of restrictive fiscal policy.
Budget surpluses can be used pay off debt, accumulate funds for further investment and to slow down economic activity if needed. John Maynard Keynes advocated the use of budget surpluses, or restrictive fiscal policy, in times of economic expansion to pay off debt created in times of recession when expansive fiscal policy should be used.
Also budget surpluses can be spent in form of tax returns, where citizens would get a certain amount of money that they can spend or save, according to their wishes.

Be Sociable, Share!

•