Given that a country's national income is ₦200 billion, government expenditure is ₦60 billion, and tax revenue is ₦45 billion, what is the ratio of the budget deficit to national income?

The budget deficit = Government expenditure − Tax revenue = ₦60 billion − ₦45 billion = ₦15 billion. The ratio of the deficit to national income = (₦15 billion ÷ ₦200 billion) × 100 = 7.5%. Choosing 30% or 22.5% results from mistakenly dividing expenditure or revenue alone by national income.