In the short run, a surplus federal budget _____
A) reduces national saving.
B) reduces domestic saving.
C) stimulates aggregate demand.
D) inhibits economic growth in the long run.
E) reduces the federal debt.

Question

Quizplus · Accepted Answer

A surplus federal budget means the government is spending less than it is receiving in revenue, which allows it to pay down its debt, thereby reducing the federal debt.

In the Short Run, a Surplus Federal Budget _____