Which of the following describes a surplus in the government budget?

• A. Government expenditures exceed government revenues.
• B. Government borrows money to finance its spending.
• C. Government revenues exceed government expenditures.
• D. Government revenues are equal to government expenditures.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of a government budget surplus. A surplus occurs when the government's total revenues are greater than its total expenditures during a given period.
2. Step 2: Define government revenues as the income the government receives, primarily from taxes, fees, and other sources.
3. Step 3: Define government expenditures as the total amount the government spends on goods, services, and transfer payments.
4. Step 4: Compare revenues and expenditures: if revenues exceed expenditures, the government has a surplus; if expenditures exceed revenues, there is a deficit.
5. Step 5: Recognize that borrowing money typically happens when there is a deficit, not a surplus, so borrowing is not a characteristic of a surplus.