Which of the following policies will reduce the budget deficit while achieving greater fiscal restraint?
A)More government expenditure and higher taxes.
B)More government expenditure and lower taxes.
C)Less government expenditure and higher taxes.
D)Less government expenditure and lower taxes.

Question

Quizplus · Accepted Answer

Less government expenditure and higher taxes will reduce the budget deficit by decreasing government spending and increasing revenue. This approach is generally seen as fiscally responsible because it promotes budget sustainability and avoids adding to the national debt. Options A and B would increase the budget deficit by either increasing government expenditure or decreasing revenue. Option D would also increase the budget deficit by decreasing revenue without corresponding reduction in government expenditure.

Which of the Following Policies Will Reduce the Budget Deficit