Politicians have suggested that the budget deficit could be reduced by
A) increasing taxes and reducing expenditures.
B) lowering the interest rates.
C) imposing higher tariffs on imported goods.
D) forbidding interest payments on government bonds outsourcing.

Question

Quizplus · Accepted Answer

Increasing taxes and reducing expenditures is a common strategy used to reduce budget deficits. By increasing the revenue that the government receives and cutting back on unnecessary spending, the overall deficit can be decreased. Lowering interest rates may stimulate economic growth, but does not directly address the deficit. Imposing higher tariffs on imported goods could potentially raise revenue, but could also lead to trade wars and harm the economy. Forbidding interest payments on government bonds outsourcing is not a feasible solution as it would likely violate legal contracts and discourage investors from buying future government bonds.

Politicians Have Suggested That the Budget Deficit Could Be Reduced