Long-term effects of deficit spending. Concept Introduction: Deficit spending occurs whenever a government's expenditures exceed its revenues over a fiscal period, creating or enlarging a government debt balance. One of the reasons for deficit spending is the conscious attempt to stimulate the economy by lowering tax rates or increasing government expenditures.

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Chapter 12, Problem 4.9PA

To determine

Long-term effects of deficit spending.

Concept Introduction: Deficit spending occurs whenever a government's expenditures exceed its revenues over a fiscal period, creating or enlarging a government debt balance. One of the reasons for deficit spending is the conscious attempt to stimulate the economy by lowering tax rates or increasing government expenditures.

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