When is a balanced budget most likely to be achieved?

A balanced budget is attained when total government expenditure is equal to total revenue. This means that the government's income from taxes and other revenue sources fully covers its spending, resulting in no deficit or surplus. Achieving such a balance is crucial for maintaining fiscal responsibility, as it prevents the need for borrowing and helps ensure sustainable economic management.

In contrast, during economic depression, government revenues typically decrease due to lower income and consumption, making it less likely to achieve a balanced budget, as expenditures may still need to increase to stimulate the economy. When government expenditure is less than total revenue, it indicates a surplus rather than a balanced budget. Lastly, during inflationary periods, government revenue may increase due to higher prices leading to inflation, but expenditures can also rise rapidly, making it less predictable whether a balance will be struck. Therefore, equality between revenue and expenditure directly defines a balanced budget.