A federal budget deficit occurs when the government spends _____ than it collects in taxes.

A. all of its money

B. more

C. the same amount

D. less

The correct answer to the given question is option B. more.

A federal budget prepared by the government for the upcoming financial year may have three possibilities, namely, the expenses of government are actually more than the amount collected in taxes or the expenses of government are actually less than the amount collected in taxes or the government expenses and the collected taxes are same. When the expenses are more than the taxes, it is called as a budget deficit and if it is vice-versa, it is called as a budget surplus.