Which of the following contributed to the turn-around in the 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 spending on homeland security and wars.

Question

Quizplus · Accepted Answer

The increase in government spending on homeland security and wars, particularly the wars in Afghanistan and Iraq, contributed significantly to the turn-around in the government budget from a surplus in the early 2000s to record deficits by the end of the decade. This increased spending was not matched by sufficient increases in tax revenues or reductions in other government spending.

Which of the Following Contributed to the Turn-Around in the Government