The federal government's _________ determines the budget deficit and therefore determines the government's demand for loanable funds.
A)monetary policy
B)fiscal policy
C)congressional policy
D)economic policy

Question

Quizplus · Accepted Answer

The federal government's fiscal policy, which involves government spending and taxation, directly determines the budget deficit. When government spending exceeds its revenue, a budget deficit occurs, leading to an increased demand for loanable funds to finance the deficit.

The Federal Government's _________ Determines the Budget Deficit and Therefore