Economics Fiscal Policy Questions
A budget deficit refers to a situation where a government's expenditures exceed its revenues in a given period, resulting in a shortfall that needs to be financed through borrowing. It represents the shortfall between the government's total spending and its total revenue.
On the other hand, a trade deficit refers to a situation where a country's imports of goods and services exceed its exports. It represents the shortfall between the value of a country's imports and the value of its exports.
In summary, the main difference between a budget deficit and a trade deficit is that a budget deficit relates to a government's fiscal position, while a trade deficit relates to a country's international trade balance.