In 2005-2006, the magnitude of the federal budget deficit decreased because

Question

Quizplus · Accepted Answer

The best answer is D because it states that the growth in income increased tax receipts by more than government spending increased, which led to a decrease in the federal budget deficit. This means that the government received more revenue from taxes as people earned higher incomes, while government spending did not increase at the same rate, resulting in a smaller deficit.

In 2005-2006, the Magnitude of the Federal Budget Deficit Decreased