Answer to Question #15210 in Economics of Enterprise for babu

Question

difference between the balance of payments deficit and the budget deficit.

Answer 1

The Government budget balance, also commonly referred to as general government balance,public budget balance, or public fiscal balance, is the overall result of a country's general government budget over the course
of an accounting period (usually one year). It includes all government levels
(from national to local) and public social security funds. The budget balance is
the difference between government revenues (e.g., tax) and spending. A positive
balance is called a government budget surplus, and a negative balance is called a government budget deficit.
Some newspaper columnists refer to a balance of payments deficit. As you know, the balance of payments always balances (see the first Learn-It of this topic)
so this term doesn't really make any sense. What they mean when they use this
term is that certain sections of the balance of payments are in deficit, causing
disequilibria. In particular, they tend to be referring to current account
deficits, or sometimes trade deficits. You need to read the context of the text
in questions carefully to make sure you understand what type of deficit is
actually being referred to when the term 'balance of payments deficit' is being
used.