Balanced Budget in Economics

Steps:

• Recall that a budget balance refers to fiscal policy where inflows match outflows.
• Identify government budget as involving revenue (taxes, etc.) and spending (expenditures).
• Compare options to standard economic definitions of balance.
• Select the option matching revenue equaling spending.

Why C is correct:

• A balanced budget occurs when total government revenue equals total government spending, as defined in public finance where no deficit or surplus exists.

Why the others are wrong:

• A: Direct and indirect taxes are revenue categories, not a balance measure.
• B: Equal exports and imports define trade balance, not government budget.
• D: Equal money demand and supply relate to monetary equilibrium, not fiscal budget.

Final answer: C