A budget surplus occurs when a government's revenue exceeds its expenditures over a specific period, typically a fiscal year. This means that the government has more money coming in from sources like taxes and fees than it spends on services, infrastructure, and other obligations. A budget surplus can indicate a healthy economy and effective financial management. When a budget surplus is achieved, the government can use the extra funds in various ways. It may pay down existing debt, invest in public projects, or save for future needs. This financial cushion can help stabilize the economy during downturns or unexpected expenses.