Starting with a situation where there is a substantial budget deficit, when tax revenues grow faster than federal expenditures, the government will experience:
A)a balanced budget.
B)an increasing national debt.
C)a declining budget surplus.
D)a declining budget deficit.
E)an increasing budget deficit.

Question

Quizplus · Accepted Answer

When tax revenues grow faster than federal expenditures, it means that the government is receiving more money than it is spending. This will lead to a declining budget deficit, as the deficit is the amount by which federal expenditures exceed tax revenues. It is important to note that this does not necessarily mean that the budget will be balanced or result in a surplus, as the government could still be spending more than it is receiving in taxes.

Starting with a Situation Where There Is a Substantial Budget