When the government runs a budget deficit it must make up for the shortfall in revenues by

Question

Quizplus · Accepted Answer

When the government runs a budget deficit, it means it is spending more money than it is receiving in revenues. To make up for the shortfall, the government must borrow money by issuing bonds. Therefore, choice B (borrowing) is the correct answer. Choices A, C, D, and E are not accurate as increasing spending, cutting taxes, increasing unemployment or maintaining inflation will not help the government make up for the budget deficit.

When the Government Runs a Budget Deficit It Must Make