A government budget deficit is defined as
A) the amount that a government owes to bondholders.
B) the amount that a government refunds to taxpayers.
C) the amount the government spends in excess of revenues.
D) the amount the government collects in excess of expenditures.

Question

Quizplus · Accepted Answer

A budget deficit occurs when government spending exceeds government revenues. This means that the government is spending more money than it is taking in through taxes and other sources of income, resulting in a negative balance. Choices A and B are incorrect because they refer to specific transactions (payments to bondholders and refunds to taxpayers) and do not encompass the broader concept of overall government spending and revenue. Choice D is also incorrect for the same reason - a surplus occurs when the government collects more money than it spends, which is the opposite of a deficit.

A Government Budget Deficit Is Defined as