alleryStart learning →When the federal government spends more money than it receives in taxes in a year, it runs a:
ABudget deficit
BBudget surplus
CBalanced budget
DTrade surplus
Answer & Solution
Correct answer: A. Budget deficit
1. The budget balance depends on which side is larger.
2. Government receives money in taxes and pays out in spending.
3. When it spends more money than it receives in taxes, it runs a budget deficit.
4. The opposite case gives a surplus.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 16 'Government Budgets and Fiscal Policy'_
Keep practising Government Budgets and Fiscal Policy
Browse all Government Budgets and Fiscal Policy questions for AP Macroeconomics, or explore more Economics topics.
Related questions
Complete the fiscal rulesMatch each fiscal termStack the budget termsSort the taxes by typePull the rope to the right policyAn economy in recession would call for which kind of fiscal policy under the aggregate demA tax that is proportional at low incomes but regressive above a wage limit describes the:The standardized employment deficit is described as eliminating the impact of: