A ______________________ is created each time the federal government spends more than it collects in taxes in a given year. budg

Question

2 years ago

9

et deficit budget surplus corporate tax regressive tax.

1 answer:

Alchen [17] · Answer 1 · 2023-10-22T13:50:10+03:00

The correct option is (A) Budget deficit.

A budget deficit is created each time the federal government spends more than it collects in taxes in a given year.

<h3>What is budget deficit?</h3>

A budget deficit is created when expenditure exceeds income, therefore it can be a positive indicator for a country's finances.
The government often refers to spending as a "budget deficit" rather than income from businesses or individuals. Accumulated deficits are the basis of the national debt.
The two main causes of budget deficits are excessive government expenditure and a lack of sufficient revenue.
Tax reductions can result in a reduction in tax revenue, which can cause a budget deficit, or they might raise government expenditure above and above what it already receives in tax revenue.
Consider a simple example where the government earns $10 billion in revenue one year but spends $12 billion, resulting in a $2 billion deficit.

Learn more about the budget deficit with the help of the given link:

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