Suppose that in Year 2 there was a higher federal budget deficit than in Year 1.This could be explained by ________ in Year 2.

Question

Quizplus · Accepted Answer

A higher federal budget deficit in Year 2 could be explained by lower real GDP if fiscal policy remains constant, as lower GDP typically results in lower tax revenues and potentially higher government spending on social programs, increasing the deficit.

Suppose That in Year 2 There Was a Higher Federal