The government budget deficit is
A) the difference between government purchases and government revenues from bonds and taxes
B) caused by a lack of business sector investment
C) created when the government expenditures exceed net taxes
D) caused by leakages in the economy
E) is created by government injections

Question

Quizplus · Accepted Answer

The government budget deficit refers to the situation where the government's total expenditures exceed its total revenues or net taxes. This means that the government is spending more money than it is collecting in taxes, which results in a shortfall that must be financed through borrowing, printing money, or raising taxes in the future. The budget deficit can occur due to various factors, such as an economic recession, an increase in government spending, a decrease in tax revenues, or a combination of these factors. Therefore, option C is the correct answer.

The Government Budget Deficit Is