(1)   Balanced Budget: This one occurs when the  government's expected  expenditure is a fiscal year is  equal to the expected revenue from taxation.

(2)   Unbalanced budget: This one occurs when the government's expenditure is less or  greater than the expected revenue from taxation. There are two types  of unbalanced budgets namely:_

a)     Surplus budget: This  one occurs when the  government estimated expenditure is less than the expected revenue from taxation.

b)     Deficit budget: An economy experiences  a deficit budget  when the estimated  expenditure  is greater than the expected revenue from taxation.