Deficit spending results whenever the government
A)Issues bonds to finance the debt.
B)Finances current expenditures that exceed current tax revenues.
C)Refinances the debt.
D)None of the choices are correct.

Question

Quizplus · Accepted Answer

Deficit spending occurs when the government spends more money than it takes in through tax revenues. This excess spending must be financed somehow, often through borrowing or printing more money. Therefore, option B correctly describes deficit spending as financing current expenditures that exceed current tax revenues. Options A and C refer to ways that the government may handle its debt, but do not describe deficit spending itself. Option D is incorrect as there is a correct answer.

Deficit Spending Results Whenever the Government