Suppose a government has no debt and a balanced budget. Suddenly, it decides to spend $10 billion while raising only $8 billion worth of taxes. What will be the government's deficit?

Personal Finance
13th Edition
ISBN:9781337669214
Author:GARMAN
Publisher:GARMAN
Chapter3: Financial Statements, Tools, And Budgets
Section: Chapter Questions
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General Accounting question

Suppose a government has no debt and a balanced
budget. Suddenly, it decides to spend $10 billion while
raising only $8 billion worth of taxes. What will be the
government's deficit?
Transcribed Image Text:Suppose a government has no debt and a balanced budget. Suddenly, it decides to spend $10 billion while raising only $8 billion worth of taxes. What will be the government's deficit?
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