A federal deficit occurs when:

Question

Quizplus · Accepted Answer

A federal deficit occurs when a government spends more money than it collects in tax revenues. This results in the government having to borrow money to meet its financial obligations, which leads to an increase in the national debt. Issuing securities to the public may be one way to borrow money to cover the deficit, but it is not the cause of the deficit itself. Stock prices of private companies, social security benefits, and money supply in the market are all unrelated to the government's fiscal deficit.

A Federal Deficit Occurs When