The budget balance = ______ - government spending.Multiple choice question.excise dutiestransfer paymentspersonal income taxnet tax revenue

1. Break Down the Problem

To find the budget balance, we need to identify the appropriate expression from the options provided. The budget balance is essentially the difference between total revenue and total spending.

2. Relevant Concepts

The budget balance can be expressed mathematically as:

$\text{Budget Balance} = \text{Total Revenue} - \text{Government Spending}$

Where total revenue can be derived from taxes, including:

• Excise duties
• Transfer payments
• Personal income tax
• Net tax revenue (total taxes minus any transfer payments)

3. Analysis and Detail

Now, we analyze the options:

1. Excise Duties: These are specific taxes on goods and services and contribute to total tax revenue.
2. Transfer Payments: These are not taxes; they are payments made by the government to individuals, which should be excluded from total revenue.
3. Personal Income Tax: This is a direct tax imposed on individual income, contributing to government revenue.
4. Net Tax Revenue: This is the total revenue after accounting for transfer payments, thus representing the actual revenue available for government spending.

Given the options, the item that correctly represents a component of total revenue (and is the one to be filled in the equation) is net tax revenue.

4. Verify and Summarize

Since net tax revenue is the best option that represents the actual revenue generated for the government, we use it to express the budget balance formula.

Final Answer

The budget balance = net tax revenue - government spending.