New Tapan, an African country, invested resources in the defense sector, and as a result, its budget deficit grew. To decrease the budget deficit, the government of New Tapan cut down its expenditures in several other sectors and imposed higher taxes. Similar measures implemented by the government in the United States would most likely create _____.
A) the fiscal cliff
B) a reserve requirement
C) the debt ceiling
D) an earmark

Question

Quizplus · Accepted Answer

The fiscal cliff refers to a situation where a government faces a series of expiring tax cuts and across-the-board government spending cuts, which is similar to the measures New Tapan implemented to decrease its budget deficit.

New Tapan, an African Country, Invested Resources in the Defense