Question

Governments at all levels must submit budgets; most are required to submit balanced budgets where revenues cover anticipated expenses. But, estimating government revenues can be as difficult or even more difficult than estimating company revenue.

Why is it important that government budgets accurately estimate future revenues during economic downturns?

Answer 1

Answer:-

●For government, it is also necessary to estimate future revenue accurately during an economic downturn because it will be helpful to overcome the current situation and for making a proper budget for the benefit of society in the best possible manner.

●For the government, tax collection is the primary source of revenue, and during an economic downturn, this will affect significantly.

●Therefore, the government has to estimate income appropriately for maintaining balance in the downturn.