The government budget deficit is
A) the difference between government purchases and government revenues from bonds and taxes.
B) caused by a lack of business sector investment.
C) created when the government expenditures exceed net taxes.
D) caused by leakages in the economy.

Question

Quizplus · Accepted Answer

The government budget deficit occurs when government spending (expenditures) exceeds the amount of revenue collected from taxes (net taxes). This results in the government having to borrow money to finance the deficit, which leads to an increase in the national debt.

The Government Budget Deficit Is