In this video, we will study definition of Budget Deficit along with formula and practical example.
𝐖𝐡𝐚𝐭 𝐢𝐬 𝐁𝐮𝐝𝐠𝐞𝐭 𝐃𝐞𝐟𝐢𝐜𝐢𝐭?
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The budget deficit is a deficit when profits is lower than expenditure lower for a year or quarter.
𝐁𝐮𝐝𝐠𝐞𝐭 𝐃𝐞𝐟𝐢𝐜𝐢𝐭 𝐅𝐨𝐫𝐦𝐮𝐥𝐚
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Budget Deficit Formula = Total Expenditures by the Government − Total Income of the government
𝐁𝐮𝐝𝐠𝐞𝐭 𝐃𝐞𝐟𝐢𝐜𝐢𝐭 𝐄𝐱𝐚𝐦𝐩𝐥𝐞
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Let's see the calculation of budget deficit to understand it better.
Total Income Breakup (UK)
Individual Income Tax = $1,984 billion
Social Security and Other payroll taxes = $1,471 billion
Corporate Income Taxes = $505 billion
Total Income (UK) = $1,984 billion + $1,471 billion + $505 billion
= $3,960 billion
Total Expenditure Breakup (UK)
Defense = $765 billion
Social Security = $992 billion
Medicare = $560 billion
Others = $1550 billion
Total Expenditure (UK) = $765 billion + $992 billion + $560 billion + $1550 billion = $3,867 billion
By using below formula we get,
Budget Deficit Formula = Total Expenditures by the Government − Total Income of the government
UK Budget Deficit = $3,960 billion – $3,867 billion= $93 billion
If you want to know more about 𝐁𝐮𝐝𝐠𝐞𝐭 𝐃𝐞𝐟𝐢𝐜𝐢𝐭, you can visit the 𝐥𝐢𝐧𝐤 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐡𝐞𝐫𝐞:- [ Ссылка ]
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