Explanation:

A budget deficit occurs when expenditures surpass revenue and then up impacting the financial health of a country. The term budget deficit is generally used when talking about total economic spending rather than the budget of businesses or individuals. National debt is made of the accrued deficits in budget. A budget deficit refers to a situation when the government's total expenditure exceeds the total receipts. Therefore, a budget deficit of the government is estimated by subtracting total receipts from the total expenditure. Hence option 2nd is correct.