What is meant by the term "budget shortfall"?

The term "budget shortfall" refers to a situation where expenses exceed revenues within the budget. This occurs when an organization, government, or entity anticipates spending more money than it is able to bring in through various revenue sources, such as taxes, fees, or other income. A budget shortfall indicates a financial imbalance that can lead to the need for cuts in spending, raising new funds, or re-evaluating financial priorities to rectify the deficit.

In contrast, a surplus of revenue over expenses indicates a positive financial status, while a balanced budget scenario signifies that expenses and revenues are equal, ensuring no deficits occur. An increase in tax revenues would typically contribute to closing any existing budget shortfall rather than defining it. Thus, option B accurately captures the essence of what a budget shortfall entails.