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Learn in detail about the key concepts for understanding the State Budget using a Portuguese family as an example.
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The Alves family budget
The State Budget is the Government's projected revenue and expenditure for a calendar year. It outlines how much money is to be spent and where, as well as where the money, known as revenue, will come from to pay for the expenditure.
These principles are not unlike a family budget. Now let's look at some examples:
In the Alves Family Budget, we find notions such as...
The money the family expects to earn each month to pay for their spending, including, for instance, the purchase of a new car.
In the State Budget, we find notions such as...
Expected revenue is the total amount of money collected by the State, including taxes, levies, fees and other sources of revenue.
In the Alves Family Budget, we find notions such as...
The family has day-to-day expenses every month - groceries, transport, etc. - which may also include house and car payments, if any.
In the State Budget, we find notions such as...
All expenditure made by the State on the purchase of goods and services, wages, pensions or social support, etc.
In the Alves Family Budget, we find notions such as...
The money left over from earnings and spending. With their savings, the Alves can invest in their plan to buy a new car.
In the State Budget, we find notions such as...
This is when the balance is positive, i.e., when the revenue collected exceeds the expenditure.
In the Alves Family Budget, we find notions such as...
If their earnings cannot cover all their monthly expenses, the Alves will have to borrow money.
In the State Budget, we find notions such as...
It describes a situation in which revenue is less than expenditure, i.e., when the balance at the end of the year is negative.
In the Alves Family Budget, we find notions such as...
The Alves bought a house in 2001 and took out a loan from the bank, which they are still paying off. They need to take out another loan for the car, which is why they are accumulating debt.
In the State Budget, we find notions such as...
The money that the State owes to third parties. Loans are used to pay for all State expenditure for which there are no other resources foreseen or available.