When the government runs a deficit it must:
A)buy bonds to finance the deficit.
B)sell bonds to finance the deficit.
C)decrease the money supply to finance the deficit.
D)raise taxes immediately.

Question

Quizplus · Accepted Answer

When a government runs a deficit, it means that its expenditures exceed its revenues. To finance this deficit, the government can issue and sell bonds to investors, thereby borrowing money to cover the shortfall. This is a common practice for managing government finances during periods of deficit.

When the Government Runs a Deficit It Must