High levels of government spending or deep cuts in taxes result in a(n)________ in which the federal government spends more in a year than it receives in tax and other revenues.

Question

Quizplus · Accepted Answer

A budget deficit occurs when the government spends more money than it collects in revenue, including taxes and fees. This results in a shortfall that must be borrowed by issuing government bonds, which contributes to the national debt. A trade deficit is when the value of imports exceeds the value of exports, a national debt is the total amount of money owed by the government, a credit imbalance is an unequal distribution of borrowing and lending, and income disparity is a gap in the distribution of income.

High Levels of Government Spending or Deep Cuts in Taxes