What is the outcome when a nation’s expenditures surpass its revenues?

When a nation's expenditures surpass its revenues, it results in a deficit. This means that the government is spending more money than it is bringing in through taxes and other income sources. A deficit indicates that the government may need to borrow money to cover the gap between what it spends and what it earns.

In the context of national budgets, a deficit is a significant metric as it can affect the country’s financial health, leading to increased national debt if the situation persists over time. This scenario often requires careful management and long-term planning to ensure that the government can meet its obligations without compromising economic stability.

Other terms like surplus refer to situations where revenues exceed expenditures, while balance indicates that revenues and expenditures are equal. Investment typically refers to allocating money towards assets that will provide value over time, which is different from the fiscal condition indicated by a deficit. Understanding these concepts is crucial in economics and public finance.