What is the main goal in creating the federal budget?

What is the main goal in creating the federal budget?

a. managing businesses and increasing spending on all programs.

b. deciding how to manage the government’s tax revenue and expenditures.

c. finding a way to allow the economy to run on its own.

d. finding a way to slow down rapid economic growth.

Answer: b. deciding how to manage the government’s tax revenue and expenditures.

There is, therefore, the need to understand the federal budget mainly because it is a tool by which the government identifies how and where it will spend the money it collects through taxes and other means. Budgeting is therefore a process of developing, comparing, authorizing, communicating and implementing a plan of finance by distributing an amount of money over the operation of the federal programs and agencies without matching the country’s financial and policy goals. It requires a balance on how much funds should be provided for basic public services, physical and human capital development and resource elements. In its last essence, the federal budget is a complete monetary plan which incorporates the projections of the income, expenditure and balance or deficit which the government of the country in question intends to make and whom it intends to borrow from, and the sources from which it intends to borrow, thereby providing the blueprint on how the limited financial resources in the government shall be utilized efficiently and in an accountable manner.