A federal budget deficit occurs when:
A)there is deflation.
B)federal government purchases exceed net taxes.
C)there is inflation.
D)aggregate demand is greater than aggregate supply.
E)aggregate supply is greater than aggregate demand.

Question

Quizplus · Accepted Answer

A federal budget deficit occurs when the federal government's spending exceeds its revenue from taxes and other sources. This creates a shortfall in the government's budget, resulting in a deficit. Therefore, option B, federal government purchases exceeding net taxes, is the correct choice.

A Federal Budget Deficit Occurs When