When a government runs a deficit

Question

Quizplus · Accepted Answer

When a government runs a deficit, it means that its expenses exceed its revenue. In order to cover these expenses, the government borrows money, which increases its debt. Therefore, option A is the correct answer. Option B might be a possible solution, but it is not the only one. Option C is incorrect, as a deficit means the debt is increasing. Option D might also be a possible solution, but it is not the only one, as raising taxes or borrowing more money are also options.

When a Government Runs a Deficit