Budget Deficits
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Questions and Answers

What does a budget deficit indicate?

  • Government revenue being completely utilized
  • Government revenue exceeding government spending
  • Government spending exceeding government revenue (correct)
  • Government spending equal to government revenue
  • How can a government finance a budget deficit?

  • Reducing public spending
  • Reducing taxes
  • Issuing bonds (correct)
  • Increasing trade tariffs
  • What impact can a persistent budget deficit have on a country's economy?

  • Reduction in inflation rates
  • Strengthening of the national currency
  • Decreased unemployment rates
  • Increased government debt and interest payments (correct)
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