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GCSE Citizenship Studies · key term
A shortfall arising when government spending exceeds its revenue over a particular period.
Used by Edexcel
Paper 1, Paper 2
Revise: Taxation and SpendingA budget deficit occurs when government spends more than it receives over a period. Borrowing can help cover that shortfall. National debt is the total outstanding borrowing, rather than the shortfall in just one year's budget.
Do not confuse a budget deficit with national debt: a deficit is a shortfall over a period, while debt is outstanding borrowing.
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