If net taxes are less than government outlays,the government sector has a budget ________ and government saving ________.
A) surplus; is positive
B) deficit; cannot be used for discretionary fiscal policy
C) deficit; is negative
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

When net taxes are less than government outlays, the government is spending more than it is receiving in taxes, resulting in a budget deficit. Consequently, government saving is negative because the government is not saving but rather borrowing to finance the deficit.

If Net Taxes Are Less Than Government Outlays,the Government Sector