Deficit spending results whenever the government
A)Issues bonds to finance the debt.
B)Uses borrowed funds to finance expenditures that exceed tax revenue.
C)Refinances the debt.
D)None of the choices are correct.

Question

Quizplus · Accepted Answer

Deficit spending occurs when the government spends more money than it receives in tax revenue, leading to a budget deficit. To finance this deficit, the government must borrow funds through the issuance of bonds or other forms of borrowing. Therefore, option B is the correct answer. Option A refers to one way in which the deficit is financed, but it doesn't encompass the whole idea of deficit spending. Option C refers to refinancing existing debt, which is not directly related to deficit spending. Option D is incorrect as Option B is the correct answer.

Deficit Spending Results Whenever the Government