When the government runs a budget deficit, which of the following occurs?

A budget deficit occurs when the government spends more money than it collects in tax revenues. This situation leads to a financial shortfall, requiring the government to borrow funds to finance its excess expenditures. The definition of a budget deficit is characterized precisely by this imbalance, making it the clear and correct choice.

On the other hand, a balanced budget would imply that government expenditures equal tax revenues, which directly contradicts the scenario of a budget deficit. Taxing more than what is spent describes a budget surplus, not a deficit. Lastly, the statement about fully funding all government programs suggests that the government has sufficient resources to cover all planned expenditures, which is inconsistent with the idea of a budget deficit, where expenditures are exceeding revenues.