Which of the following contributed to the turn-around in the U.S. government budget from a surplus in the early 2000s to record deficits by the end of the decade?
A) An increase in household saving.
B) An increase in business saving.
C) An increase in tax revenues because of a recession.
D) An increase in government purchases on homeland security and wars.

Question

Quizplus · Accepted Answer

The U.S. government budget was beset by international problems in the early 2000s, which caused it to spend much on military and defense activities. During this time period, large tax cuts were also enacted, Any increase in government purchases or decreases in net taxes will reduce or reverse a government surplus.

Which of the Following Contributed to the Turn-Around in the U.S