What Is a National Budget?

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A national budget is the proposal of revenues and expenditures a government expects for a given fiscal year. It is much like any budget in that it estimates necessary spending against necessary income, only on a much larger scale.

The national budget has many different departments to finance. How well a nation fares economically depends largely on its ability to manage its budget wisely. The budget impacts a nation’s citizens in terms of how much taxes need to be paid and in terms of the benefits individuals and groups receive from the government. Government officials are paid out of the budget, and the nation’s military defenses are supported. Many government agencies operate out of the national budget. In many countries, the national budget is formulated by the executive branch and approved by a legislative branch.