What is a budget?

• A. Is the total amount of revenue collected in a year
• B. Gives an account of the countries expenses and spending for the next financial year
• C. Represents the government's annual tax collection plan
• D. Sets the maximum limit for government debt

Answer: (B)

A budget is a plan that shows how much money the government expects to raise and how it plans to spend it in the coming financial year. It lays out revenues from taxes and other sources and assigns funds to programs and services like health, education, and infrastructure. It also shows how resources will be managed—whether there will be a surplus or a deficit and whether borrowing will be needed to cover expenses. This is why the description that highlights expenses and spending for the next financial year best captures what a budget is: a forward-looking plan that allocates financial resources to meet the government’s priorities. The other descriptions describe only total revenue, a tax collection plan, or a debt limit, which don’t capture the full planning and allocation aspect of a budget.