Deficit spending occurs when
A)Consumers spend less than their income.
B)Investment spending declines.
C)Net export spending alters macroeconomic outcomes.
D)Government spending becomes greater than the tax revenues collecteD.Deficit spending refers to the use of borrowed funds or sale of government assets to finance government expenditures that exceed tax revenues.

Question

Quizplus · Accepted Answer

Deficit spending refers to the situation where the government spends more money than it collects in tax revenues. In such circumstances, the government may have to borrow money or sell assets to finance the budget shortfall. This type of spending typically results in an increase in the government's debt level.

Deficit Spending Occurs When