In the short run, a federal budget deficit will most likely _____
A) stimulate aggregate demand.
B) reduce federal debt.
C) boost economic growth.
D) reduce national saving.
E) boost domestic saving.

Question

Quizplus · Accepted Answer

A federal budget deficit means the government is spending more money than it is collecting in revenue, which can result in increased government spending in the economy. This increase in government spending can stimulate aggregate demand and potentially boost economic growth in the short run.

In the Short Run, a Federal Budget Deficit Will Most