Problem 25

Introduction

• Budget Deficit:  It is indicative of a country's economic health, a situation like this occurs when the government's spending surpasses government's revenue i.e., tax collection is less than total spending for a financial year.
• Trade Deficit: A situation like this occurs when a nations import expenses surpasses its export receipts i.e., when buying of goods from foreign nation is more than selling of goods to foreign nations.