If spending by the federal government exceeds revenue,
A)the price level tends to fall
B)the money supply must increase
C)the aggregate demand curve shifts leftward
D)the aggregate supply curve shifts rightward
E)there is a federal budget deficit

Question

Quizplus · Accepted Answer

When spending by the federal government exceeds revenue, it means that the government is running a budget deficit. This is because the government will need to borrow money to cover the shortfall in revenue, which will result in an increase in the national debt.

If Spending by the Federal Government Exceeds Revenue