Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Chapter 30, Problem 1MCQ
To determine
Correct option regarding consequence of government expenditure exceeding tax revenue.
Expert Solution & Answer
Explanation of Solution
An overrun in spending over income results in a budget deficit, which can be a sign of a nation's financial stability. The phrase is frequently used to describe government expenditure rather than that of companies or people. Budget deficits have an impact on the overall amount a country owes to creditors, the overall of its yearly budget deficits, and the national debt.
Current costs surpass the amount of money obtained via routine operations when a budget deficit is detected. A government may boost income generating activities or reduce specific expenditures in order to balance the country's budget deficit, also known as a fiscal deficit.
Thus, from the above we can conclude that the correct option is B.
Chapter 30 Solutions
Krugman's Economics For The Ap® Course
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