Which of the following statements about government deficit spending is most accurate?
A)The federal government violates the law by running deficits because the Canadian Constitution requires the government to balance its budget each year.
B)One reason the government has a hard time reducing deficits is that there is a great deal of pressure on the government to expand its spending and transfer payments each year.
C)Although the government used to run big deficits,it has consistently run surpluses since the late 1980s.
D)The government has used deficit spending to lower the national debt.

Question

Quizplus · Accepted Answer

Deficit spending occurs when a government spends more money than it collects. Often, governments do this to fund things like infrastructure projects, social programs, or military expenses. In Canada, deficit spending has been a controversial topic for years, with some arguing that it is necessary to stimulate the economy during tough times and others arguing that it creates problems in the long term. Option B is the most accurate because it correctly identifies one reason why governments struggle to reduce deficits--pressure to spend more money on important programs. Options A and C are incorrect because they are factually inaccurate. Although there is no law requiring the Canadian government to balance its budget each year, the government did commit to balancing the budget during the 1990s, and it has run deficits since then. Additionally, the government did run surpluses in the late 1990s and early 2000s, but that is not the case now. Option D is also incorrect because deficit spending typically increases the national debt rather than lowers it.

Which of the Following Statements About Government Deficit Spending Is